A 


apace  With  progress 


:  >. 


THE  CASE  FOR  TAX  REVISION 


AS  A  RESULT  OF  THE  PRESENT  SITU¬ 
ATION,  THERE  IS  A  NOTORIOUS 
EVASION  OF  THE  TERMS;  «£)F  THE 
REVENUE  LAW  WHICH  i'AR EriSffy  0r 
JUST  IN  PRINCIPLE  AND  UNEN-  Ul‘  Hi 
FORCIBLE  IN  PRACTICE.  THIS 
SITUATION  INEVITABLY  LEA 
A  DISRESPECT  OF  THE  LA 
OTHER  FIELDS,  AND  CALLS  FOR  FAR- 
REACHING  CHANGES  IN  THE  PRES¬ 
ENT  SYSTEM  OF  TAXATION. 

(ILLINOIS  SPECIAL  TAX  COMMISSION) 


ARY 


Upending  amendment 

TO  THE  ILLINOIS  CONSTITUTION 

To  be  voted  upon  November  7,  1916 


|  Explanations  and  Comparisons  with  the  Constitutional  Tax 
Provisions  of  Other  States 


Nation-wide  Opinion  and  Pertinent  Facts  Presented 


FOR  DISTRIBUTION  BY  THE 

Illinois  Tax  Amendment  Committee 


FRANK  I.  MANN,  Chairman,  Gilman 
S.  B.  MONTGOMERY,  Vice-Chairman,  Quincy 


! 


iWl 


COMPILED  BY 

THE  CIVIC  FEDERATION 
CHICAGO 


IT  TAKES  A  MAJORITY  OF  ALL  WHO  VOTE  IN  NOVEMBER  TO  ADOPT  THE  AMENDMENT. 


Page 


FOREWORD  . .  3  , 

FART  I — Statement  of  the  Case .  5 

Chapter  I — The  Present  System  Explained .  5 

Illinois  Revenue  Law  Requirements... .  6 

Chapter  II — Evils  of  the  Present  System .  7 

Unequal  Distribution  of  Burdens .  7 

Tax  Evasion .  8 

Why  Intangibles  Escape  Taxation .  9 

Confiscatory  Rates — Double  Taxation .  9 

Tangible  Personalty  Complaints .  ll 

To  Summarize .  12 

Chapter  III — What  Rigid  Enforcement  Would  Mean....  13 

Chapter  IV — History  of  Movement .  14 

Chapter  V — Proposed  Amendment .  15 

Text  and  Present  Provisions .  15 

Changes  Amendment  Would  Make .  16 

How  and  When  Voted  For . 17 

Chapter  VI — New  Intangible  Taxes — Revenues .  17 

PART  II — Tax  Systems  of  Other  States .  19-50 

PART  III — General  Expert  Opinion .  51 

Letters  . 51-54 

Opinion  of  U.  S.  Supreme  Court .  54 

Other  Facts  and  Opinions .  54 

Advisory  Vote  1912 .  59 

Vote  in  General  Assembly .  59 

Organization  Endorsements .  62 

Press  Expressions  of  Approval .  62-68 

PART  IV — Appendix  .  69 

Questions  and  Answers .  69-72 

Miscellaneous  Data .  72 


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FOREWORD 


There  is  pending  in  Illinois  to  be  voted  upon  Nov.  7,  1916,  at  the 
general  election,  an  Amendment  to  the  Revenue  Article  of  the  State 
Constitution,  submitted  by  the  Forty-ninth  General  Assembly  and 
designed  to  authorize  future  General  Assemblies  to  revise  our  un¬ 
workable  and  unequal  personal  property  tax  laws. 

It  is  hoped  that  those  who  are  especially  interested  in  the  subject 
of  taxation  and  in  ending  tax  evils  in  Illinois,  will  find  in  this  volume 
a  convenient  hand-book  of  information. 

Tax-dodging  in  Illinois  has  become  notorious.  Largely  as  a  re¬ 
sult  of  this,  there  is  general  complaint  of  undue  and  increasing  bur¬ 
dens  upon  real  estate;  of  double  taxation;  of  inequality  of  tax  bur¬ 
dens  ;  of  inadequate  public  revenues,  and  of  “burdens  falling  upon  the 
weak  and  the  unwary,  while  the  shrewd  and  powerful  escape.” 

Other  States,  similar  in  character  to  Illinois,  by  modern  and 
scientific  methods,  have  made  tax-dodging  a  rare  offense  instead  of 
a  common  habit,  and  have  devised  means  for  taxing  effectively  and 
justly  those  classes  of  property  which  largely  escape  in  Illinois.  More¬ 
over,  they  derive  from  them  larger  revenues  with  less  friction.  The 
Constitution  at  present  prevents  the  Illinois  General  Assembly  from 
adopting  any  of  these  methods. 

The  pending  Amendment,  if  approved  by  the  people,  will  merely 
give  to  our  General  Assembly  the  power  over  personal  property  tax 
laws  which  will  enable  them  to  meet  modern  conditions  and  such 
future  problems  as  may  arise — a  legislative  power  now  allowed  by 
Connecticut,  New  York,  Rhode  Island,  Michigan,  Minnesota,  Wis- 


3 


IF  YOU  WANT  TAX  REVISION,  VOTE:  “YES.1 


SILENCE  IS  A  VOTE  TO  KEEP  THE  PRESENT  TAX  SYSTEM. 


consin,  Pennsylvania,  Virginia,  Maryland  and  other  States.  It  is  a 
conservative  measure,  essential  to  any  improvement. 

Only  people  who  are  satisfied  with  the  present  system  of  taxation  and 
who  believe  that  no  change  is  necessary ,  will  fail  to  vote  for  this  meas¬ 
ure.  All  who  believe  that  the  present  system  should  be  improved 
should  work  and  vote  for  its  adoption. 

The  fact  that  on  Nov.  2,  1915,  the  voters  of  three  conservative 
States — Massachusetts,  Maryland  and  Kentucky — overwhelmingly 
adopted  similar  amendments,  definitely  setting  aside  the  worn-out 
general  property  tax  and  establishing  the  principle  of  classification 
in  taxation,  indicates  the  interest  which  is  taken  in  taxation  and  the 
trend  of  enlightened  public  sentiment.  The  fact  that  the  voters  of 
New  York  State  rejected  a  pending  amendment  which  would  have 
slightly  restricted  the  now  practically  unlimited  powers  of  the  State 
legislature  over  tax  laws,  indicates  a  decided  popular  opinion  in  favor 
of  giving  the  legislative  body  ample  powers — an  opinion  based  on 
more  than  thirty  years  of  experience. 

The  pending  Illinois  Amendment  and  conditions  demanding  its 
adoption  will  be  discussed  in  subsequent  pages.  An  effort  also  is  made 
to  give  an  impartial  survey  of  the  situation  throughout  the  country, 
supported  by  official  and  responsible  statements,  and  by  quotations 
from  recognized  authorities. 

Grateful  appreciation  is  due  to  the  many  citizens  throughout  the 
country  for  the  great  help  they  have  given  by  their  prompt  and 
courteous  replies. 

Questions  and  suggestions  will  be  -  welcomed  and  should  be  ad¬ 
dressed  to ' 

ILLINOIS  TAX  AMENDMENT  COMMITTEE. 

The  Temple,  Chicago. 


4 


PART  I— STATEMENT  OF  THE  CASE 


CHAPTER  I 

THE  PRESENT  SYSTEM  EXPLAINED 

Results — not  theories — demonstrate  that  the  present  Illinois  general 
property  taxation  system  is  no  longer  practicable ;  that  it  cannot  be  en¬ 
forced  equitably  or  effectively  under  modern  conditions. 

The  general — or  so-called  “uniform” — property  tax  is  based  on 
the  theory  that  every  kind  of  property,  regardless  of  character  or 
condition,  shall  be  taxed  in  proportion  to  value  and  by  uniform 
method  and  rate.  This  theory  presupposes  that  all  property  can  bear 
identical  burdens  and  also  that  all  kinds  of  property  are  equally  easy 
for  the  assessor  to  find  and  estimate  their  values. 

The  imperative  requirement  of  the  uniform  property  taxation  sys¬ 
tem  is  uniformity  of  valuation.  All  property  must  be  assessed  at  the 
same  percentage  of  actual  value — equalized — so  that  each  and  all, 
with  the  same  tax  rates,  shall  bear  its  required  proportion  of  the 
burden  of  taxation. 

The  rule  of  taxation  based  on  this  theory  has  persisted  in  the  State 
Constitution  of  Illinois  since  1818.  At  that  time  the  rule  was  fit  and 
applicable.  Property  was  almost  entirely  of  the  tangible,  visible 
class — land,  houses,  furniture,  live  stock,  vehicles  and  produce.  Since 
that  time,  especially  in  recent  years,  new  and  complicated  forms  of 
wealth  have  developed — and  with  all  of  these  varying  classes  no  one 
rule  of  taxation  can  cope  successfully.  It  is  a  safe  assertion  that  at 
the  present  time  at  least  a  third  of  the  total  wealth  of  Illinois  is  made 
up  of  these  modem  economic  values,  which,  being  invisible — intangi¬ 
ble,  easily  escape  taxation,  and  shift  their  share  of  the  burden  of  the 
support  of  government  upon  tangible  property.  Thus  a  rule  once 
good  has  become  useless  through  inevitable  economic  change.  In  spite 
of  its  name,  it  no  longer  produces  even  a  semblance  of  uniformity,  and 
■the  point  at  which  it  has  broken  down  is  in  the  attempted  taxation  of 
intangible  values. 

The  first  Illinois  Constitution — 1818 — did  not  expressly  recognize 
intangible  values.  Article  VIII — the  bill  of  rights — Sec.  20,  read : 

The  mode  of  taxation  shall  be  by  valuation,  so  that  every  person  shall 
pay  a  tax  in  proportion  to  the  value  of  the  property  he  or  she  has  in 
Lis  or  her  possession. 

In  1848  a  new  Constitution  was  adopted,  with  a  separate  article 
on  revenue,  in  which  were  introduced  provisions  relating  to  some 
■of  the  more  complex  forms  of  property  and  values  created  with  the 


5 


TALK  TO  YOUR  NEIGHBORS  AND  FRIENDS  ABOUT  THIS. 


WRITE  FOR  ADDITIONAL  COPIES. 


economic  development  of  the  State.  Sec.  2  of  this  revenue  article 
read : 

The  General  Assembly  shall  provide  for  levying  a  tax  by  valuation, 
so  that  every  person  and  corporation  shall  pay  a  tax  in  proportion  to 
the  value  of  his  or  her  property;  such  value  to  be  ascertained  by  some 
person  or  persons  to  be  elected  or  appointed  in  such  manner  as  the  Gen¬ 
eral  Assembly  shall  direct,  and  not  otherwise;  but  the  General  Assembly 
shall  have  the  power  to  tax  peddlers,  auctioneers,  brokers,  hawkers, 
merchants,  commission  merchants,  showmen,  jugglers,  inn-keepers, 
grocery-keepers,  toll-bridges  and  ferries,  and  persons  using  and  exercis¬ 
ing  franchises  and  privileges  in  such  manner  as  they  shall,  from  time  to 
time  direct. 

A  comparison  of  the  foregoing  provision  with  Sec.  1  of  the  present 
Constitution — 1870  (see  page  16)  shows  that  the  1848  Section  was 
practically  rewritten,  except  that  liquor  dealers,  insurance,  telegraph 
and  express  interests  or  business,  venders  of  patents  and  corpora¬ 
tions  owning  or  using  franchises  and  privileges,  were  added  to  the 
list  of  objects  which  the  General  Assembly  was  given  especial  au¬ 
thority  to  tax,  “by  general  law,  uniform  as  to  the  class  upon  which 
it  operates.”  This  last  phrase  for  the  first  time  established  the  prin¬ 
ciple  of  classification  and  recognized  its  need,  but  restricted  its  ap¬ 
plication  rigidly  to  those  specific  forms  of  value  then  clearly  in  view. 
A  broader  application  of  this  principle  at  that  time  would  have  en¬ 
abled  the  Illinois  General  Assembly  to  meet  economic  conditions 
which  have  since  arisen,  and  would  have  saved  the  people  of  this 
State  from  many  present-day  taxation  ills. 

Following  these  attempts  to  make  the  fundamental  law  of  Illinois 
conform  to  changing  economic  conditions,  the  Supreme  Court  passed 
upon  many  questions  involving  the  Constitution  and  the  revenue 
laws  in  relation  to,  and  in  explanation  of,  what  constitutes  “prop¬ 
erty,”  and  to  whom  it  shall  he  assessed.  From  all  this  has  been  built 
up  the  Illinois  ideas  and  practices  as  to  “taxable  property.” 

ILLINOIS  REVENUE  LAW  REQUIREMENTS 

The  Revenue  Law  conforms  to  the  provisions  of  the  Constitution 
and  the  decisions  of  the  courts.  As  a  result,  all  property  is  presumed 
to  be  assessed  at  the  same  proportion  of  its  actual  value  and  made 
to  pay  the  same  rates  of  taxation.  The  Revenue  Law  requires  the 
assessment  and  taxation  of  all  property  in  Illinois,  not  exempted  by 
law,  as  enumerated  below: 

1.  What  property  assessed  and  taxed.  That  the  property  named  in 
this  section  shall  be  assessed  and  taxed  except  so  much  thereof  as  may 
be  in  this  act  exempted: 

First. — All  real  and  personal  property  in  this  State. 

Second. — All  moneys,  credits,  bonds  or  stocks  and  other  investments, 
the  shares  of  stock  of  incorporated  companies  and  associates,  and  all 
other  personal  property;  including  property  in  transitu  to  or  from  this 
State,  used,  held,  owned  or  controlled  by  persons  residing  in  this  State. 

Third. — The  shares  of  capital  stocks  of  banks  and  banking  companies 
doing  business  in  this  State. 

Fourth. — The  capital  stock  of  companies  and  associations  incorporated 
under  the  laws  of  this  State. 


Acting  under  Sec.  3  of  Article  IX  (printed  on  page  16),  the  General 
Assembly  has  exempted  from  taxation  the  classes  of  property  enumer¬ 
ated  in  that  section.  * 

The  assessing  and  taxing  system  of  Illinois  is  to-day,  therefore, 
practically  the  same  as  the  system  which  followed  the  Constitution 
of  1818.  Both  systems  were  predicated  upon  the  idea  that  all,  or 
nearly  all,  taxable  property  was  visible  to  the  eye  of  the  assessor. 
In  1818  cash  was  about  the  only  form  of  property  that  could  be 
hidden  from  the  assessors  easy  observation,  and  the  amount  of  cash 
in  the  State  was  pitifully  small  indeed.  Since  then  the  lonely  prairies 
have  been  populated,  men  have  joined  hands  for  vast  enterprises  of 
many  kinds,  organized  and  financed  in  many  different  ways.  The 
great  development  of  wealth  and  commerce  has  outstripped  the 
assessing  methods  of  ninety-eight  years  ago  and  proved  conclusively 
that  uniformity  of  method  produces  the  greatest  inequalities  in  re¬ 
sult — a  fact  recognized  by  tax  experts  throughout  the  land,  and  even 
by  the  Supreme  Court  of  the  United  States.  (See  page  54.) 

Taxation  in  Illinois  is  Uniform  in  Name  Only . 


CHAPTER  II 


EVILS  OF  THE  PRESENT  SYSTEM 
1.  Unequal  Distribution  of  Burdens 

Among  the  most  glaring  evils  of  the  general  property  tax  system 
in  Illinois  is  the  gross  inequality  in  the  distribution  of  tax  burdens. 
During  a  period  notable  for  its  production  of  new  forms  of  wealth, 
the  proportion  of  the  burden  of  direct  taxation  borne  by  real  prop¬ 
erty  has  not  decreased,  as  might  have  been  expected  under  a  so-called 
“uniform”  system  of  taxation,  but  has  increased,  as  shown  by  the 
following  table  of  percentages  prepared  from 
Board  of  Equalization  for  the  years  indicated : 

TABLE  I 

Class  of  Property. 

•Real  property  . 

•Personal  property  .  20.40 

tRailroad  property  . 

tCapital  stock  of  corporations  other  than  railroads 


reports 

of  the 

State 

1915. 

1914. 

1873. 

70.16 

69.52 

67.69 

20.40 

20.66 

21.56 

8.34 

8.55 

9.14 

1.10 

1.27 

1.61 

•Includes  railroad  property  locally  assessed. 
tAssessed  by  State  Board  of  Equalization. 


This  unfair  effect  of  the  general  property  tax  upon  real  property 
has  been  noted  in  every  State  which  has  attempted  to  enforce  this 
obsolete  method  in  the  'face  of  modern  economic  conditions.  Mr. 
Allen  Ripley  Foote,  Columbus,  Ohio,  Past  President  of  the  National 
Tax  Association,  states  the  matter  fairly  when  he  says : 

“The  attempt  to  tax  all  property  by  a  uniform  rule,  results  in  the  plac¬ 
ing  of  burdens  of  taxation  upon  real  estate.” 


Extensive  testimony  to  the  same  effect  from  New  York  and  many 
other  States  will  be  found  in  subsequent  pages. 


7 


iF  YOU  THINK  PRESENT  TAX  LAWS  ARE  BAD,  VOTE  FOR  THE  AMENDMENT. 


VOTE:  “YES."  —  NO  VOTE  COUNTS  AS  A  VOTE  “NO.” 


2.  Tax  Evasion 


Another  phase  of  the  inequality  of  tax  bilrdens  is  the  complete 
escape  from  all  taxation  of  millions  of  dollars  in  intangible  values, 
and  this  is  largely  responsible  for  the  undue  burden  borne  in  vary¬ 
ing  proportion  by  the  other  classes  of  property,  the  bulk  of  the  load 
always  falling  upon  real  estate. 

A  complete  and  exact  statement  of  the  total  amount  of  this  kind  < 
of  property  which  evades  its  fair  share  of  the  cost  of  government  is 
impossible  because  of  the  various  forms  it  takes  and  the  utter  lack 
of  an  authentic  basis  even  for  estimate  except  in  a  very  few  cases. 

A  comparison  of  wealth  of  approximately  the  same  class  taxed  and 
untaxed,  in  the  rare  cases  where  data  is  available,  however,  are  sug¬ 
gestive  of  what  a  complete  comparison  might  show  if  it  could  he 
made. 

The  total  full  value  of  all  taxable  property  in  Illinois  for  the  year 
1915 — obtained  by  multiplying  the  equalized  assessed  values  by  three 
— was  $7,508,619,408.  On  the  same  basis,  the  total  full  value  of 
taxable  personal  property  was  $1,523,461,047.  Of  this  total  per¬ 
sonal  valuation,  the  following  enumeration  of  intangible  property 
for  1915 — full  value  obtained  as  above — is: 


TABLE  II 


Class.  Cook  County. 

Moneys  other  than  Banker,  etc . $  6,318,558 

♦Credits  other  than  Banker,  etc .  11,777,034 

Bonds  and  Stocks .  18,072,807 

Shares  of  Capital  Stock  not  of  this  state..  632,949 

Patent  Rights  . 

Franchises  .  5,850 

Annuities  and  Royalties .  127,488 

Investments  secured  by  Real  Estate .  316,131 


Other 
Counties. 
$  94,362,477 
112,950,024 
13,657,905 
3,461,607 
593,229 
311,763 
90,747 
3,311,769 


Total. 

$100,681,035 

124,727,058 

31,730,712 

4,094,566 

593,229 

317,613 

218,235 

3,627,900 


♦Compare  with  Table  IV. 


$37,250,817 


$228,739,521  $265,990,338 


Of  the  $1,523,461,047  total  of  personal  property  returned  for  taxa¬ 
tion  at  “full  value,”  $399,768,396  was  listed  under  the  vague  heading, 
“All  Other  Property” — to  such  an  extent  has  the  taxing  system  of 
1818  become  impossible  of  honest,  accurate  and  efficient  operation. 
If  we  concede — by  liberal  estimate — that  20  per  cent  of  the  item  “All 
Other  Property”  covers  intangible  values,  the  total  intangible  wealth 
of  the  state,  as  listed  for  taxation,  appears  as  follows : 

TABLE  III 


Other 

Class.  Cook  County.  Counties.  Total. 

Listed  in  Table  II . $37,250,817  $228,739,521  $265,990,338 


Twenty  Per  Cent  of  all  Other  Property -  66,802,157  13,151,623  79,953,679 

$104,052,974  $241,891,044  $345,944,017 


The  following  figures  taken  from  the  report  of  the  Auditor  of 
Public  Accounts  concerning  the  amount  of  deposits  in  Illinois  in 
State  banks  alone,  makes  a  significant  comparison  with  the  foregoing 
figures : 

TABLE  IV 


Chicago.  Other  Cities.  Total. 

State  Bank  Deposits  Owned  by  Individuals. $496,208,734  $198,307,895  $694,516,629 


8 


The  report  of  the  Comptroller  of  Currency  indicates  that  there  is 
over  a  billion  dollars  of  bank  deposits  in  Illinois  which  are  subject 
to  taxation.  There  are  no  available  statistics  on  the  amount  of  mort¬ 
gages  in  Illinois,  but  estimates  place  the  total  at  more  than  a  billion 
dollars.  Scrutiny  of  these  tables  discloses  the  greatest  inequalities  and 
discrepancies  in  the  taxation  of  intangibles  as  between  Cook  County 
and  the  rest  of  the  State,  and  equally  glaring  discrepancies  exist  in 
mortgage  taxation.  In  Cook  County  for  many  years  no  attempt  at 
the  taxation  of  mortgages  has  been  made.  Nearly  every  other  county 
in  the  State  makes  some  attempt  at  mortgage  taxation.  In  an  in¬ 
tensive  study  of  mortgage  taxation,  comparing  Lafayette  County, 
Wisconsin,  with  Jo  Daviess  County,  Illinois,  Professor  T.  S.  Adams, 
then  of  the  Wisconsin  Tax  Commission,  estimated  that  about  23.4 
per  cent  of  the  mortgages  in  Jo  Daviess  County  actually  were  taxed. 
Most  Circuit  Clerks  and  Recorders  and  taxing  officials  with  whom 
the  Secretary  of  the  Federation  has  talked  in  visiting  other  counties 
of  the  State,  however,  estimate  that  the  greatest  industry  and  most 
efficient  efforts  are  well  rewarded  if  from  10  to  15  per  cent  of  the 
mortgages  recorded  are  actually  taxed. 

This  special  reference  to  bank  deposits  and  mortgages  is  not  made 
to  suggest  their  singling  out  as  special  objects  of  taxation,  but  be¬ 
cause  their  very  character  brings  them  sufficiently  to  light  to  indicate 
the  weakness  of  the  present  system  and  the  even  greater  amount  of 
evasion  in  other  lines  of  wealth  which  may  be  both  more  productive 
of  income  and  more  susceptible  of  easy  concealment. 

To  the  foregoing  estimated  $1,000,000,000  in  bank  deposits  and 
$1,000,000,000  in  mortgages  must  be  added  many  other  intangible 
values,  including  promissory  notes,  credits  and  securities  generally. 

3.  Why  Intangibles  Escape  Taxation 

For  this  wholesale  evasion  there  are  many  reasons.  It  is  physically 
impossible  for  the  assessor  and  his  deputies  to  view  the  millions  of 
evidences  of  intangible  wealth  in  the  strong-boxes  and  other  de¬ 
positories  of  Illinois.  The  utter  lack  of  data  above  noted  makes  him 
almost  helpless  in  his  efforts  to  cope  with  modern  conditions  on  the  old 
basis  to  which  he  is  restricted.  Assessment  by  guess  is  the  resulting 
rule.  Gross  inequalities  as  between  neighbor  and  neighbor  and  county 
and  county,  and  the  general  escape  of  intangibles  from  taxation  result. 

The  fact  that  taxation  of  intangibles  at  the  same  rate  at  which 
tangible  property  is  taxed,  would  operate  to  create  financial  and 
economic  disturbances  of  the  gravest  character,  vitally  affecting  every 
citizen  whether  direct  taxpayer  or  not,  destroys  all  popular  senti¬ 
ment  for  a  rigid  enforcement  of  the  existing  system. 

Confiscatory  Rates — Double  Taxation 

The  lowest  tax  rate  in  any  Illinois  municipality  probably  approxi¬ 
mates  $1.50  per  $100  full  value.  The  highest  tax  rate  considerably 
exceeds  $3.00  per  $100  full  value.  The  best  that  a  thrifty  savings 
depositor,  who  listed  his  account  faithfully  as  required  by  law,  could 

9 


TAX  EVILS  CAN  BE  CURED  ONLY  BY  INTEREST  OF  CITIZENS. 


GET  THE  ORGANIZATIONS  YOU  BELONG  TO  TO  STUDY  THIS. 


expect  would  be  to  have  left  $1.50  out  of  his  $3.00  interest  on  a  $100 
account,  after  he  had  paid  his  personal  property  taxes.  If  he  lived 
in  some  communities  all  of  the  interest  would  be  taken  and  the  de¬ 
positor  would  actually  be  paying  for  the  privilege  of  saving  his  money. 
The  owner  of  a  checking  account  who  complied  with  the  law  would 
have  to  pay  his  taxes  out  of  his  principal.  The  average  rate  in  Illi¬ 
nois  municipalities  is  probably  $2.00  per  $100  full  value.  This  means 
that  a  widow  left  with  $10,000  for  her  sole  support  would  have  to  > 
give  up  in  taxes  $200  out  of  an  income  of  $500  or  $600  a  year.  Pro¬ 
portionately  the  same  thing  has  happened  to  much  smaller  estates. 
Sometimes,  when  the  victim  is  well  advised,  a  kindly  Board  of  Re¬ 
view  violates  the  law  in  the  interest  of  equity,  but  more  frequently 
the  victim  does  not  know  what  is  going  on  until  the  tax  bill  is  ren¬ 
dered,  and,  generally  speaking,  it  is  then  too  late. 

The  taxation  of  mortgaged  property  and  of  mortgages  as  well  as 
some  other  forms  of  intangible  value  occasions  frequent  complaint 
of  “double  taxation.”  Most  farms  and  most  homes  in  Illinois  to-day 
are  bought  on  the  part-payment  plan,  a  little  cash  and  a  note  secured 
by  mortgage  being  given  by  the  purchaser. 

If  a  man  buys  a  home — say,  for  $4,000 — and  pays  for  it  in  full 
with  cash,  he  will  be  taxed  on  the  value  of  his  property  only.  If  he 
pays,  say,  $1,000  on  his  home,  giving  a  mortgage  for,  say  $3,000, 
he  will  have  to  pay  the  full  tax  on  the  property,  the  same  as  if  he 
had  paid  for  it  fully  in  cash.  The  mortgage,  also,  is  required  to  be 
taxed  under  the  present  Illinois  Revenue  Law.  Thus,  there  would 
be  taxes  collected  on  $7,000  of  “value,”  instead  of  $4,000.  It  makes 
no  difference  who  actually  hands  over  the  mortgage  tax  to  the  col¬ 
lector,  the  man  who  borrows  the  money  must  in  the  end  pay  it,  be¬ 
cause  he  must  pay  an  interest  rate  that  will  take  care  of  the  tax 
rate.  If  this  is  not  done,  the  money  lender  will  send  his  cash  to 
another  State  for  investment.  Capital  flows  in  the  direction  of  least 
resistance  and  greatest  opportunities.  The  property  on  which  in¬ 
tangibles  are  predicated  must  always  take  care  of  the  intangible  taxes. 
Suppose  the  tax  on  mortgage  notes  in  Illinois  was  made  to  be  6  per 
cent  on  full  value,  and  collected,  would  any  money  be  offered  to  loan 
at  6  per  cent  ?  Would  not  the  charge — in  interest  and  commissions — 
be  at  least  12  per  cent? 

To  illustrate  another  form  of  double  taxation:  Suppose  that  a 
man  sells  a  horse  to  another  man  and  takes  the  purchaser’s  note 
in  payment  for  the  animal,  both  the  note  and  the  horse  being  in 
existence  at  the  time  assessments  are  made  for  purposes  of  taxation. 

In  such  case,  both  the  note  and  the  horse  are  taxable  as  property. 

If  the  original  owner  of  the  horse  had  retained  it  until  after  assess¬ 
ment  day,  April  1,  there  would  have  been  no  note  to  tax.  If  the  note 
and  the  horse  both  be  taxed,  then  the  horse  must  be  made  to  earn 
twice  as  much  as  if  it  had  not  been  sold. 

Consideration  of  the  ease  with  which  certain  intangible  values  may 
be  created  is  interesting.  A  may  loan  B  $1,000  and  take  his  note. 
To-morrow  B  loans  the  same  $1,000  to  C.  The  next  day  C  repeats 


10 


the  transaction  with  D,  and  so  on  for  each  of,  say  300  business  days 
of  the  year,  by  which  time  $300,000  of  taxable  values  have  been 
created  out  of  the  original  $1,000. 

Under  similar  category  may  be  included  the  popular  complaint 
against  any  effort  to  follow  the  law  literally  and  tax  at  current  rates 
cash  in  bank  to  the  person  who  has  it  on  deposit.  The  depositor’s 
money,  of  course,  is  not  actually  in  the  bank,  but  generally  is  loaned 
out  to  borrowers — also  required  to  pay  tax  upon  such  cash  as  they 
may  have.  The  bank  also  is  taxed  upon  its  capital  stock  valuer  cre¬ 
ated  by  using  the  money  on  deposit  and  deriving  an  income  there¬ 
from.  Thus  the  law  requires  the  depositor,  the  bank  and  the  man 
who  borrows  the  depositor’s  cash  from  the  bank,  to  pay  on  virtually 
the  same  money. 

Frequent  complaint  also  is  heard  against  the  operation  of  the 
present  system  in  the  taxation  of  corporate  bonds,  public  and  private, 
and  the  capital  stock  of  corporations — complaints  under  the  latter 
head  coming  chiefly  from  owners  of  small  incorporated  businesses. 
The  almost  infinitesimal  revenues  now  derived  from  these  classes  of 
wealth  suggest  that  any  change  in  the  basis  of  their  assessment  which 
would  result  equitably,  could  hot  fail  to  benefit  the  public  treasury. 

In  short,  the  tax  upon  intangible  property,  under  the  Illinois  sys¬ 
tem,  is  demoralizing  in  its  effects.  Every  person  who  acts  honestly 
with  the  State  and  obeys  the  law  in  paying  taxes  on  his  intangible 
property,  not  only  is  penalized  by  a  confiscatory  income  tax,  but 
utterly  fails  to  receive  justice  at  the  hands  of  the  law  in  comparison 
with  other  holders  of  the  same  class  of  property.  His  tax  is  predi¬ 
cated  upon  the  implied  pledge  of  the  State  that  all  other  similar  prop¬ 
erty  shall  be  assessed  uniformly  with  his.  He  is  entitled  to  equal 
protection  of  the  law  and  he  gets  nothing  of  the  sort.  Under  such 
conditions  it  is  not  surprising  that  many  citizens  of  all  walks  of  life 
are  deterred  from  reporting  intangibles,  and  that  there  is  no  popular 
demand  for  rigid  enforcement  of  the  personal  property  tax  laws.  As 
the  Illinois  Special  Tax  Commission  has  well  said:  “This  situation 
inevitably  leads  to  a  disrespect  of  the  law  in  other  fields ;  and  calls  for 
far-reaching  changes  in  the  present  system  of  taxation.” 

4.  Tangible  Personalty  Complaints 

Generally  voiced  and  fully  as  important  as  the  grievances  against 
intangible  property  taxation  on  the  present  basis,  are  those  directed 
against  a  uniform  property  tax  on  household  furniture  in  the  home 
and  implements  of  craft  or  labor  owned  by  artisans  and  working¬ 
men.  Application  of  the  current  tax  rate  to  these  classes  justly  may 
be  regarded  as  placing  an  undue  burden  upon  the  necessities  of  life. 
Moreover,  even  for  this  property  no  uniform  standard  of  assessment 
exists  in  Illinois.  Cook  County,  defying  the  law,  arbitrarily  “ex¬ 
empts”  schedules  of  less  than  $300,  because  cost  of  collection  ex¬ 
ceeds  revenue  derived  from  such  small  items,  and  this  “exemption” 
eliminates  household  furniture  to  a  limited  extent,  except  when  ex¬ 
cessive  valuations  have  resulted  from  failures,  through  ignorance  or 


11 


BOOST  FOR  UNIFORMITY,  EQUALITY  AND  JUSTICE  IN  TAXATION. 


BOOST  THE  TAX  AMENDMENT. 


lack  of  time,  to  “schedule  under.”  Most  other  Illinois  counties 
attempt  to  tax  this  property  like  any  other,  and  without  graduation. 

Complaint  also  is  heard  from  the  merchant — especially  the  small 
retailer — as  to  various  inequities  in  connection  with  the  taxation  of 
goods  in  stock,  particularly  in  those  cases  where  the  goods  are  car¬ 
ried  on  account  pending  sale. 

In  addition,  these  owners  of  visible  personal  property  feel  that  their 
holdings  are  much  like  those  of  the  owner  of  real  property — easy 
objects  of  the  burdens  of  taxation  shifted  by  the  escape  of  intangible 
wealth. 

5.  To  Summarize 

The  foregoing  partial  listing  of  complaints  against  the  operation 
of  the  general  property  tax  system  in  Illinois  indicates  two  con¬ 
clusions  : 

1.  That  the  uniform  rule  of  taxation  with  its  tendency  to  im¬ 
pose  burdens  with  reference  to  inability  to  escape  rather  than  in  pro¬ 
portion  to  ability  to  pay,  penalizes  industry,  thrift  and  enterprise; 
places  the  burden  on  the  weak,  the  conscientious  and  the  unwary; 
discourages  individual  ownership  of  land  not  only  by  heaping  dis¬ 
proportionate  burdens  on  real  estate,  but  also  by  making  conditions 
and  interest  rates  hard  for  the  borrower;  and  is  most  unfavorable 
to  the  general  prosperity  and  development  of  the  State. 

2.  That  any  statement  of  a  community’s  wealth  naturally  groups 
the  various  classes  of  values  composing  the  same,  and  that  obviously 
the  methods  of  taxation  as  to  each  class  must  be  suited  to  its  char¬ 
acter  if  justice  is  to  be  secured  and  revenues  derived. 

All  this  discussion  suggests  that  some  classes  of  property — espe¬ 
cially  intangible  property — may  with  equity  be  taxed  at  a  lower  rate 
than  other  forms  of  property,  especially  real  estate.  It  will  be  noted 
in  subsequent  pages  that  the  tendency  in  the  most  prosperous  and 
substantial  States — where  real  property  interests  dominate — is  toward 
the  taxing  of  intangibles  at  a  low  specific  rate,  or  toward  the  taxing 
of  the  incomes  from  the  intangibles  instead  of  taxing  the  property 
itself.  It  also  will  be  noted  that  these  methods  produce  so  much 
greater  revenues  from  intangible  wealth  than  Illinois  derives,  that 
land  tax  burdens  are  reduced.  Compare,  for  example,  the  revenues 
derivable  for  state  and  local  purposes  from  the  bonds  and  stocks, 
shares  of  capital  stock  of  corporations  not  of  this  state,  and  real  estate 
investments,  etc.,  listed  in  Cook  County  for  1915  [see  Table  II],  with 
the  revenue  derived  from  wealth  of  like  character  in  the  city  of  Bal¬ 
timore  for  1915.  [See  pages  27-8.]  The  total  of  these  Cook  County 
items — $19,021,887 — at  the  average  rate  of  $2.00  per  $100,  full  value, 
would  yield  only  $380,438.  At  a  rate  of  only  $0.45  per  $100,  Balti¬ 
more — a  city  one-fourth  the  size  of  Chicago — will  derive  $937,942  from 
the  same  kind  of  property  in  the  same  year,  for  state  and  local  pur¬ 
poses.  Scrutiny  of  reports  on  low-rate  taxation  of  intangibles  from 
other  states,  appearing  on  subsequent  pages,  shows  clearly  the  advan¬ 
tages  of  modem  methods  from  the  viewpoint  of  revenues  alone. 

Even  if  attempt  were  made  to  scale  intangible  values  to  correspond 


12 


to  real  property  values,  however,  it  still  would  be  inequitable  to  tax 
these  values  in  precisely  the  same  way,  because  the  income  from  real 
estate  investment  is  computed  after  charging  off  the  taxes  to  expense 
and  deducting  them  from  the  gross  earnings,  whereas  the  earnings  of 
an  intangible  investment  are  net  and  the  taxes  must  be  paid  out  of 
the  income. 

In  addition,  there  is  the  practical  consideration  of  the  mobile  char¬ 
acter  of  intangible  wealth;  its  importance  to  the  welfare  of  a  State; 
the  danger  of  driving  it  away  altogether  unless  it  is  taxed  in  con¬ 
formity  with  economic  principles,  and  the  fact  that  no  State  has 
Wn  able  to  make  it  pay  its  fair  proportion  of  the  tax  burden  under 
the  general  property  rule. 


CHAPTER  III 

WHAT  EIGID  ENFORCEMENT  WOULD  MEAN 

Tax  rates  and  valuations  are  determined  by  the  demand  for  public 
revenue.  Needs  for  public  revenues  in  Illinois,  as  in  all  other  States, 
are  increasing  constantly  with  the  new  demands  which  are  being  made 
upon  government. 

To  meet  these  demands  under  the  present  system,  present  rates 
must  be  increased  and  applied,  generally,  to  increased  valuation  of 
property  already  taxed.  If  the  pending  amendment  is  adopted,  rev¬ 
enues  from  new  sources  derived  in  an  equitable  manner  by  methods 
worked  out  in  other  States,  may  be  reasonably  expected.  This  will 
tend  not  only  to  relieve  from  undue  share  of  the  prospective  increase, 
property  already  taxed,  but  to  equalize  the  future  burdens  between 
property  which  now  pays  heavily  and  property  which  pays  little  or 
frequently  nothing.  If  the  pending  amendment  should  fail  of  adoption 
a  far  more  rigid  enforcement  of  the  present  system  than  has  ever  been 
known  would  accompany  future  demands  for  larger  public  funds. 

Rigid  enforcement  of  the  present  system  sometimes  is  urged  by 
the  superficially  inclined  as  a  cure  for  present  inequalities.  The  fol¬ 
lowing  are  a  few  of  the  developments  which  would  attend  a  real  at¬ 
tempt  at  rigid  enforcement: 

1.  Greatly  increased  and  probably  intensely  centralized  powers  of 
assessment  and  an  army  of  deputies  working  constantly  throughout 
the  year. 

2.  Heavy  penalties  with  provisions  for  rigid  enforcement  against 
delinquents. 

3.  An  inquisitorial  drag-net  by  which  the  assessors  would  attempt 
to  question  every  possible  holder  of  intangible  wealth. 

4.  Persons  having  no  taxable  property  would  be  put  to  the  ex¬ 
pense  and  inconvenience  of  establishing  their  innocence  of  criminally 
hiding  property. 

5.  Intangible  property  of  every  kind,  regardless  of  income-pro¬ 
ducing  ability,  would  have  to  pay  taxes  by  value  out  of  its  net  in- 


13 


WHEN  YOU  HAVE  READ  THIS,  GIVE  IT  TO  A  FRIEND. 


BE  SURE  TO  VOTE  “YES."  FAILURE  TO  DO  SO  IS  A  VOTE  FOR  PRESENT  EVILS. 


come.  This  would  operate  to  create  mgner  uiteresr  rates,  necessi¬ 
tating  greater  profits  from  all  real,  property  and  increasing  rents  and 
the  cost  of  living. 

6.  Money  in  bank  would  be  taxed  at  a  rate  so  much  higher  than 
the  rate  of  exchange  that  it  would  go  to  more  favorable  jurisdictions, 
creating  financial  stringency  in  Illinois,  at  least  during  the  assess¬ 
ment  period.  Already  this  tendency  has  been  observed  in  some  pdrts 
of  the  State. 

7.  Even  if  bank  runs  and  bank  closings  did  not  result,  the  banks 
would  be  compelled  to  pay  a  higher  rate  of  interest  on  deposits  to 
make  up  for  the  tax  rate,  and  this  would  increase  the  interest  rates 
on  all  sorts  of  loans. 

8.  A  confiscatory  tax  rate  even  more  than  would  be  now  a  menace 
confronting  every  prospective  investor  in  Illinois,  and  to  many  times 
the  extent  which  it  now  deters  new  capital  for  purchase  of  existing 
tangible  property,  from  coming  into  this  State,  it  would  operate  to 
depreciate  all  values  of  all  tangible  property  by  diminishing  the  mar¬ 
ket  for  it.  Other  States  would  profit  by  the  hegira  of  capital  from 
Illinois  and  this  State  would  be  retarded  in  its  economic  growth 
and  development. 

9.  Every  stick  of  furniture,  every  wash-boiler,  every  pick  and 
shovel  and  hammer  and  saw,  would  have  to  contribute  its  mite,  re¬ 
gardless  of  petty  annoyance — and  frequently  hardship — on  the  part 
of  thousands  of  individuals,  and  of  a  cost  of  assessment  and  collec¬ 
tion  far  exceeding  the  revenues  derived. 

Industrialism — employer  and  employe  alike — would  be  injured  by 
a  rigid  enforcement  of  the  present  uniform  property  tax  system,  even 
if  it  were  done  in  the  most  impartial  manner  possible. 


CHAPTER  IV 

HISTORY  OF  TAX  REVISION  MOVEMENT 

Public  appreciation  of  the  evils  and  conditions  discussed  in  preced¬ 
ing  pages  has  been  growing  for  many  years.  The  Illinois  tax  re¬ 
vision  movement  began  officially  in  1909 ;  the  General  Assembly  pro¬ 
vided  by  law  for  the  Illinois  Special  Tax  Commission,  consisting 
of  seven  members,  serving  without  pay,  the  duties  of  which  compre¬ 
hended  a  study  of  the  Illinois  taxation  system  in  comparison  with 
methods  used  in  other  States  and  the  making  of  recommendations 
for  needed  changes. 

As  provided  by  the  law,  Governor  Deneen,  in  April,  1910,  ap¬ 
pointed  the  Commission  and  named  as  members  the  following: 

John  P.  Wilson,  lawyer,  Chicago,  Chairman. 

♦Alfred  M.  Craig,  Galesburg,  Justice  of  the  Illinois  Supreme  Court 
from  1873  to  1900. 

Edmund  J.  James,  President,  Illinois  State  University,  Urbana,  Secre¬ 
tary. 


14 


B.  F.  Caldwell,  Springfield,  farmer,  and  former  Member  of  Congress. 

*A.  P.  Grout,  Winchester,  farmer.  A  trustee  of  the  University  of 
Illinois. 

Harrison  B.  Riley,  President  Chicago  Title  and  Trust  Company. 

B.  L.  Winchell,  Chicago,  then  President  of  the  St.  Louis  &  San  Fran¬ 
cisco  Railroad  Company. 

•Mr.  Craig  and  Mr.  Grout  since  have  passed  away. 

The  Commission  reported  in  1911,  and  published  a  voluminous 
report  in  relation  to  its  findings  and  conclusions  concerning  Illinois 
taxation  conditions.  In  Chapter  XI,  page  200,  of  its  report,  the 
Commission  in  presenting  its  final  conclusions,  says: 

The  most  serious  difficulties  appear  in  the  assessment  of  personal  in¬ 
tangible  property,  such  as  moneys  and  credits,  mortgages,  bonds  and 
stocks.  The  assessment  of  such  holdings  on  the  same  basis  as  tangible 
property  appears  to  be  impossible;  while,  if  possible,  the  result  would  be 
highly  unjust  and  inequitable. 

The  Commission  said  further: 

Our  study  of  the  tax  systems  of  other  States  shows  clearly  that  other 
methods  of  taxation  than  the  general  property  tax  are  both  more  equit¬ 
able  and,  at  the  same  time,  more  successful  as  means  of  raising  public 
revenue  from  intangible  property.  But  no  such  methods  can  be  intro¬ 
duced  in  Illinois  under  the  present  Constitutional  restrictions  requiring 
the  taxation  of  all  classes  of  property  on  an  absolutely  uniform  basis.  It 
therefore  becomes  necessary  for  any  adequate  change  in  the  System  of 
taxation,  that  the  Constitutional  provisions  should  be  amended. 

*********  In  view  of  our  conclusions  that  any  ade¬ 
quate  changes  in  the  basis  of  taxation  in  this  State  must  be  preceded 
by  changes  in  the  Constitutional  Provisions  we  recommend  and  submit 
herewith,  for  the  consideration  of  the  General  Assembly,  the  following 
Proposed  Amendment  to  the  Constitution  of  the  State  of  Illinois,  to  be 
added  as  Sec.  14  of  Article  IX  of  the  State  Constitution. 

The  Amendment  proposed  is  that  which  is  to  be  voted  on  next 
November 


CHAPTER  V 

PROPOSED  AMENDMENT— EFFECT  AND  POSSIBILITIES 
Proposed  Amendment 

Adopted  by  the  Senate,  by  two-thirds  vote,  May  18,  1915.  Con¬ 
curred  in  by  the  House,  by  two-thirds  vote,  May  20,  1915.  To  be 
voted  upon  by  the  people,  Nov.  7,  1916.  Session  Laws,  1915,  p.  731. 

To  be  added  to  Article  IX — “Revenue”- — of  the  Constitution  of 
Illinois  and  to  be  numbered  “Section  14  of  Article  IX”: 

ARTICLE  IX,  SEC.  14.  FROM  AND  AFTER  THE  DATE 
WHEN  THIS  SECTION  SHALL  BE  IN  FORCE  THE  POWERS 
OF  THE  GENERAL  ASSEMBLY  OVER  THE  SUBJECT  MAT¬ 
TER  OF  THE  TAXATION  OF  PERSONAL  PROPERTY  SHALL 
BE  AS  COMPLETE  AND  UNRESTRICTED  AS  THEY  WOULD 
BE  I-F  SECTIONS  ONE  (1),  THREE  (3),  NINE  (9),  AND 
TEN  (10),  OF  THIS  ARTICLE,  OF  THE  CONSTITUTION  DID 
NOT  EXIST;  PROVIDED,  HOWEVER,  THAT  ANY  TAX 


15 


PASS  THIS  COPY  ALONG,  AND  WRITE  FOR  ANOTHER  ONE. 


IT  TAKES  A  MAJORITY  OF  ALL  WHO  VOTE.  IN  NOVEMBER  TO  ADOPT  THE  AMENDMENT. 


LEVIED  UPON  PERSONAL  PROPERTY  MUST  BE  UNIFORM 
AS  TO  PERSONS  AND  PROPERTY  OF  THE  SAME  CLASS 
WITHIN  THE  JURISDICTION  OF  THE  BODY  IMPOSING 
THE  SAME,  AND  ALL  EXEMPTIONS  FROM  TAXATION 
SHALL  BE  BY  GENERAL  LAW,  AND  SHALL  BE  REVOC¬ 
ABLE  BY  THE  GENERAL  ASSEMBLY  AT  ANY  TIME. 

Those  portions  of  the  Constitution  which  the  Amendment  would 
affect  are  as  follows: 

Sec.  1.  The  General  Assembly  shall  provide  such  revenue  as  may  be 
needful  by  levying  a  tax,  by  valuation,  so  that  every  person  and  corpora¬ 
tion  shall  pay  a  tax  in  proportion  to  the  value  of  his,  her  or  its  prop¬ 
erty — such  value  to  be  ascertained  by  some  person  or  persons  to  be 
elected  or  appointed  in  such  manner  as  the  General  Assembly  shall 
direct,  and  not  otherwise;  but  the  General  Assembly  shall  have  power 
to  tax  peddlers,  auctioneers,  brokers,  hawkers,  merchants,  commission 
merchants,  showmen,  jugglers,  inn-keepers,  grocery-keepers,  liquor  deal¬ 
ers,  toll  bridges,  ferries,  insurance,  telegraph  and  express  interests  or 
business,  venders  of  patents  and  persons  or  corporations  owning  or 
using  franchises  and  privileges,  in  such  manner  as  it  shall  from  time  to 
time  direct  by  general  law,  uniform  as  to  class,  upon  which  it  operates. 

Sec.  3.  The  property  of  the  State,  counties  and  other  municipal  cor¬ 
porations,  both  real  and  personal,  and  such  other  property  as  may  be 
used  exclusively  for  agricultural  and  horticultural  societies,  for  school, 
religious,  cemetery  and  charitable  purposes,  shall  be  exempted  from 
taxation;  but  such  exemption  shall  be  only  by  general  law.  In  the 
assessment  of  real  estate  encumbered  by  public  easement,  any  deprecia¬ 
tion  occasioned  by  such  easement  may  be  deducted  in  the  valuation  of 
such  property. 

Sec.  9.  The  General  Assembly  may  vest  the  corporate  authorities  of 
cities,  towns  and  villages  with  power  to  make  local  improvements  by  spe¬ 
cial  assessment  or  by  special  taxation  of  contiguous  property  or  otherwise. 
For'  all  other  corporate  purposes,  all  municipal  corporations  may  be 
vested  with  authority  to  assess  and  collect  taxes;  but  such  taxes  shall 
be  uniform  in  respect  to  persons  and  property  within  the  jurisdiction 
of  the  body  imposing  the  same. 

Sec.  10.  The  General  Assembly  shall  not  impose  taxes  upon  municipal 
corporations,  or  the  inhabitants  or  property  thereof,  for  corporate  pur¬ 
poses,  but  shall  require  that  all  the  taxable  property  within  the  limits 
of  municipal  corporations  shall  be  taxed  for  the  payment  of  debts  con¬ 
tracted  under  the  authority  of  law,  such  taxes  to  be  uniform  in  respect 
to  persons  and  property  within  the  jurisdiction  of  the  body  imposing 
the  same.  Private  property  shall  not  be  liable  to  be  taken  or  sold  for 
the  payment  of  the  corporate  debts  of  a  municipal  corporation. 

Changes  Amendment  Would  Make 

Sec.  1  of  Article  IX  would  be  changed  by  adoption  of  the  Amend¬ 
ment  so  as  to  authorize  the  legislature  to  enact  laws  which  would 
substitute  different  and  suitable  rates  and  methods  for  the  just  and 
sure  taxation  of  each  of  the  various  classes  of  property,  instead  of 
the  present  so-called  “uniform”  method  which  permits  the  escape 
of  millions  from  taxation. 

The  Proposed  Amendment  would  affect  Sec.  3,  as  quoted  above, 
to  the  extent  of  classifying  the  personal  property,  which  may  or  may 
not  be  exempted  by  the  General  Assembly;  provided  that  any  exemp¬ 
tions  made  must  be  by  general  and  not  special  law,  and  shall  not  be 
contractual  but  revocable  at  any  time. 

16 


Secs.  9  and  10,  above  quoted,  would  be  affected  by  the  Amend¬ 
ment  to  the  extent  of  permitting  municipal  corporations  to  levy  taxes 
on  personal  property  according  to  classes,  in  such  manner  as  the  Gen¬ 
eral  Assembly  may  provide  by  law,  if  it  so  elects. 

There  may  be  a  different  rate  of  tax  on  the  different  classes  of 
personal  property  which  the  General  Assembly,  as  it  sees  fit,  shall 
provide  for  by  law.  But  the  tax  rate  shall  be  uniform  as  to  all  prop¬ 
erty  in  each  class. 

But  the  Amendment  does  not  require  the  legislature  to  take  any 
action  whatever ;  and,  if  it  6ees  fit,  it  need  not  'change  the  present 
system.  Technically,  the  present  Constitution  requires  uniform  taxa¬ 
tion,  uniform  valuation,  and  uniform  tax  rates  on  all  taxable  prop¬ 
erty.  The  Amendment  removes  that  restraint  so  far  as  personal 
property  is  concerned. 

The  Proposed  Amendment  will  be  submitted  to  the  voters  of  the 
State  of  Illinois,  for  adoption  or  rejection,  at 
Nov.  7,  1916.  Following  is  the  Constitutional 
the  submission  and  adoption  of  amendments: 

THE  PROPOSED  AMENDMENTS  SHALL  BE  PUBLISHED 
IN  FULL  AT  LEAST  THREE  MONTHS  PRECEDING  THE 
ELECTION,  AND  IF  A  MAJORITY  OF  THE  ELECTORS  VOT¬ 
ING  AT  SAID  ELECTION  SHALL  VOTE  FOR  THE  PRO¬ 
POSED  AMENDMENTS,  THEY  SHALL  BECOME  A  PART 
OF  THIS  CONSTITUTION. 

The  ballot  laws  provide  that  proposals  to  amend  the  Constitution 
shall  be  submitted  to  the  voters  upon  a  ballot,  separate  and  distinct 
from  that  upon  which  appear  the  names  of  candidates  for  the  various 
public  offices.  They  also  reaffirm  the  Constitutional  requirement  of 
a  majority  of  electors  voting  at  the  election  in  order  that  the  pend¬ 
ing  Amendment  may  be  ratified. 

It  will  be  seen  from  the  foregoing  that  to  secure  the  adoption  of 
the  Proposed  Amendment  it  must  be  voted  for  by  a  majority  of  those 
voting  at  the  election.  It  is  highly  important  that  voters  be  im¬ 
pressed  with  necessity  of  marking  their  ballots  for  the  Amendment. 

Each  voter  should  understand  that  failure  to  vote  for  the  pending 
Amendment  to  the  Revenue  Article  of  the  Constitution  is  a  vote 
against  the  Amendment.  It  is  equivalent  to  saying  that  the  present 
tax  system  is  ideal  and  needs  no  change  in  any  particular. 


:he  general  election, 
provision  regulating 


CHAPTER  VI 

NEW  INTANGIBLE  TAXES— GREATER  REVENUES 

A  new  system  of  taxing  intangible  values  will  be  made  possible 
by  adoption  of  the  Proposed  Amendment.  Exactly  what  plan  will 
be  utilized  will  be  determined  by  the  legislature.  It  goes  without 
saying  that  the  law-makers  of  Illinois  will  take  into  account  the 


17 


IF  YOU  WANT  TAX  REVISION,  VOTE:  “YES.1 


SILENCE  IS  A  VOTE  TO  KEEP  THE  PRESENT  TAX  SYSTEM. 


new  systems  which  have  been,  and  are  being,  tried  in  other  States. 
In  general,  it  may  be  said  that  the  purpose  and  effect  of  such  sys¬ 
tems  are  to  establish  justice  between  taxpayers  and  to  produce  public 
revenues.  In  seeking  to  attain  these  results,  effort  has  been  directed 
to  devise  methods  which  would  act  automatically.  That  is  to  say, 
to  create  conditions  Tyhich-  would  impose  a  tax  at  such  a  time  and 
in  such  a  manner  that  its  payment  cannot  be  evaded. 

Further  on  in  these  pages  the  devices  employed  in  several  States 
are  stated  in  some  detail,  with  figures  showing  how  they  result.  It 
is  enough  to  say  that  any  one  of  the  modern  methods,  if  applied  to 
Illinois,  would  produce  vastly  greater  revenues  than  are  now  derived 
from  the  taxation  of  intangible  values. 

The  proportion  of  the  tax  burden  borne  by  real  property  has  a  direct 
bearing  upon  rents,  and  this  gives  to  tenants  as  well  as  landowners  a 
keen  interest  in  bettering  the  tax  system. 

As  suggested  in  earlier  pages,  demands  for  increased  public  rev¬ 
enues  may  reasonably  be  expected,  and  the  increased  burden  must  be 
added  to  tangible  property — real  and  personal — if  the  present  sys¬ 
tem  is  retained.  On  the  other  hand,  much,  if  not  all,  of  this  neces¬ 
sary  increase  in  the  immediate  future  may  be  provided  for  by  cre¬ 
ating  a  new  taxation  system  for  intangible  values,  by  obtaining  in 
an  equitable  but  effective  manner  revenues  from  taxable  values  now 
practically  undiscoverable  and  wholly  non-productive  of  revenues. 

This  hopeful  expectation  is  justified  by  the  fact  that  in  other  States 
where  new  methods  have  been  tried  the  burden  of  taxation  upon 
tangible  property  has  been  decreased,  while  the  general  revenues  have 
been  greatly  augmented. 


IS 


PART  II— TAX  SYSTEMS  OF  OTHER  STATES 


In  order  to  present  to  the  reader  an  intelligent  idea  of  the  tax 
situation  in  the  United  States,  so  far  as  classification  is  concerned, 
tlie  Civic  Federation  sent  the  subjoined  letter  to  the  Governors  of 
the  several  States: 

Dear  Sir:  Will  you  please  give  to  us  the  following  information  con¬ 
cerning  tax  conditions  in  your  State: 

Does  your  State  Constitution  impose  the  “general  property”  tax  sys¬ 
tem,  or  does  it  permit  classification  of  different  kinds  of  property? 
Does  it  give  your  legislature  broad  powers  in  enactments  affecting  tax¬ 
ation? 

How  long  has  the  existing  revenue  provision  been  embodied  in  your 
Constitution? 

If  the  Constitution  does  not  permit  classification,  is  there  a  pronounced 
movement  for  an  amendment  thereto,  designed  to  give  broader  powers 
to  the  legislature  in  this  direction? 

Has  any  such  amendment  been  voted  on  by  the  people,  or  suggested 
in  recent  years? 

What  was  its  scope? 

Was  it  rejected,  or  adopted;  and  jf  rejected,  what  appeared  to  be  the 
underlying  reasons  for  such  rejection? 

An  expression  of  your  own  views  on  the  desirability  of  permission 
or  inhibition  of  the  principles  of  classification  in  a  State  Constitution 
would  be  greatly  appreciated. 

Our  reason  for  asking  these  questions  lies  in  the  fact  that  Illinois 
will  vote  next  year  on  a  “property  classification  amendment.” 


CLASSIFICATION  STATES 


Based  on  information  thus  obtained  is  the  following  list  of  States 
which  have  few  or  no  constitutional  restrictions,  which  authorize 
classification  of  property,  or  in  which  authority  to  classify  to  some 
extent  has  been  assumed : 


Arizona 

Colorado 

Connecticut 

Delaware 

Georgia 

Iowa 

Kentucky* 


Maryland! 
Massachusetts* 
Michigan 
Minnesota 
New  Mexico 
New  York 
North  Dakota 


Oklahoma 

Pennsylvania 

Rhode  Island 

Vermont 

Virginia 

Wisconsin 


South  Dakota  will  vote  upon  a  classification  amendment  Nov.  7,  1916 — 
at  the  same  time  as  Illinois. 

♦Adopted  Nov.  2,  1915. 

|Has  used  classification  since  1897;  amendment  confirming  and  ex¬ 
tending  legislative  authority  adopted  Nov.  2,  1915. 


Replies  from  these  states  follow.  With  these  replies  are  printed 
the  pertinent  constitutional  provisions  and  also  such  authoritative  data 
hs  are  available  from  commonwealths  which  have  operated  to  any  con- 


19 


TALK  TO  YOUR  NEIGHBORS  AND  FRIENDS  ABOUT  THIS. 


WRITE  FOR  ADDITIONAL  COPIES. 


fciderable  extent  under  modern  substitutes  for  the  general  tax  upon 
personal  property. 

The  data  as  to  methods  are  presented  solely  for  information  and 
without  comment.  The  states  which  have  taken  advantage  of  elastic 
constitutional  provisions  have  dealt  with  the  evils  of  the  general  prop¬ 
erty  tax  in  different  ways.  Illinois  to-day  is  powerless  to  employ  any 
of  these  modem  remedies.  The  fact  that  in  none  of  these  states  have 
the  legislative  bodies  gone  to  extremes,  and  in  many  cases  have  worked 
out  great  betterments,  is  significant.  If  the  pending  Constitutional 
Amendment  receives  the  required  large  majority  for  adoption,  it  may 
be  assumed  that  the  General  Assembly  will  adopt  such  modern  meth¬ 
ods  as  seem  best  fitted  to  conditions  in  Illinois. 

ARIZONA 

In  the  following  letter  Secretary  Jesse  L.  Bryce  of  the  Arizona 
State  Tax  Commission,  to  whom  was  referred  a  letter  to  Governor 
Hunt  of  Arizona,  returned  the  Civic  Federation’s  original  letter  with 
his  replies  interpolated  therein.  The  answers  are  indicated: 

Does  your  State  Constitution  impose  the  “general  property”  tax  sys¬ 
tem,  or  does  it  permit  of  classification  of  different  kinds  of  property? 
Does  it  give  your  legislature  broad  powers  in  enactments  affecting  taxa* 
tion? 

Answer:  Permits  Classification,  Sec.  1,  Article  IX,  Constitution.  All 
property  assessed  under  general  property  tax.  Express  business  only 
specific  tax. 

How  long  has  the  existing  revenue  provision  been  embodied  in  your 
Constitution  ? 

Answer:  Since  adoption,  Dec.  12,  1911. 

*  *  *  *  *  *  *  *  *  *  *  * 

Do  you  favor  giving  the  legislature  broad  powers  as  to  classification 
or  non-classification  of  property? 

Answer:  This  Commission  is  opposed  to  any  specific  law  of  taxation 
on  any  class  of  property. 

JESiSE  L.  BRYCE,  Secretary,  State  Tax  Commission. 

Constitutional  Provisions:  Article  IX,  Sec.  1.  The  power  of  taxation  shall 
never  be  surrendered,  suspended,  or  contracted  away.  All  taxes  shall  be  uni¬ 
form  upon  the  same  class  of  property  within  the  territorial  limits  of  the  au¬ 
thority  levying  the  tax,  and  shall  be  levied  and  collected  for  public  purposes 
only. 

Sec.  2.  There  shall  be  exempted  from  taxation  all  Federal,  state,  county, 
and  municipal  property.  Property  of  educational,  charitable,  and  religious  as¬ 
sociations  or  institutions  not  used  or  held  for  profit  may  be  exempted  from 
taxation  by  law.  Public  debts,  as  evidenced  by  the  bonds  of  Arizona,  its  coun¬ 
ties,  municipalities,  or  other  subdivisions,  shall  also  be  exempt  from  taxa¬ 
tion.  There  shall  further  be  exempt  from  taxation  the  property  of  widows, 
residents  of  this  state,  not  exceeding  the  amount  of  $1,000,  where  the  total  as¬ 
sessment  of  such  widow  does  not  exceed  $2,000.  All  property  in  the  state  not 
exempt  under  the  laws  of  the  United  States  or  under  this  Constitution,  or  ex¬ 
empted  by  law  under  the  provisions  of  this  section,  shall  be  subject  to  taxa¬ 
tion  to  be  ascertained  as  provided  by  law. 

Sec.  12.  The  law-making  power  shall  have  authority  to  provide  for  the  levy 
and  collection  of  license,  franchise,  gross  revenue,  excise,  income,  collateral, 
and  direct  inheritance,  legacy,  and  succession  taxes,  also  graduated  income 
taxes,  graduated  collateral  and  direct  inheritance  taxes,  graduated  legacy  and 
succession  taxes,  stamp,  registration,  production,  or  other  specific  taxes. 

Note. — It  is  significant  that  only  two  states — Arizona  and  New  Mexico — 
of  all  authorizing  classification,  whose  officials  are  not  enthusiastic 
about  this  principle,  not  only  are  new  and  comparatively  undeveloped  in 
character,  but  never  have  tried  the  substitution  of  other  methods  for  the 
general  tax  upon  personal  property.  They  are  like  the  Illinois  of  three¬ 
score  years  ago;  they  have  little  intangible  property  to  raise  taxation 


20 


problems.  It  is  in  the  populous,  prosperous  states,  where  intangible 
values  make  up  a  large  proportion  of  the  total  wealth,  that  the  value  of 
modern  methods  is  recognized. 

COLORADO 

Denver,  Oct.  11,  1915. — Dear  Sir:  Your  letter  to  the  Governor  has 
been  turned  over  to  the  tax  commission  for  answer.  The  Constitution 
of  Colorado  imposes  the  general  property  tax  system,  but  has  a  clause 
which  permits  the  legislature  to  classify  property  for  tax  purposes.  The 
Constitution  does  not  give  the  legislature  broad  powers  in  its  enactments 
affecting  taxation.  The  existing  revenue  provision  was  placed  in  the 
Constitution  in  1876.  While  the  Constitution  gives  the  legislature  the 
power  to  classify  property  for  taxation  purposes  and  impose  different 
rates  upon  different  classes  of  property,  there  does  not  appear  to  be  any 
pronounced  movement  to  increase  legislation  tending  to  classify  property 
and  tax  the  different  classes  at  different  rates.  The  tax  commission 
is  in  favor  of  giving  the  legislature  very  broad  powers  in  the  matter  of 
tax  laws,  and  among  these  the  power  to  classify  property  for  taxation 
purposes  is  especially  important.  THE  COLORADO  TAX  COMMISSION, 
by  John  B.  Phillips. 

Constitutional  Provisions:  Article  X,  Sec.  2.  The  General  Assembly  shall 
provide  by  law  for  an  annual  tax  sufficient,  with  other  resources,  to  defray 
the  estimated  expenses  of  the  state  government  for  each  fiscal  year. 

Sec.  3.  All  taxes  shall  be  uniform  upon  the  same  class  of  subjects  within 
the  territorial  limits  of  the  authority  levying  the  tax,  and  shall  be  levied  and 
collected  under  general  laws,  which  shall  prescribe  such  regulations  as  shall 
secure  a  just  valuation  for  taxation  of  all  property,  real  and  personal:  Pro¬ 
vided,  That  the  personal  property  of  every  person  being  the  head  of  a  family, 
to  the  value  of  $200,  shall  be  exempt  from  taxation.  *  *  * 

Sec.  4.  The  property,  real  and  personal,  of  the  state,  counties,  cities,  towns, 
and  other  municipal  corporations,  and  public  libraries,  shall  be  exempt  from 
taxation. 

Sec.  5.  Lots  with  buildings  thereon,  if  said  buildings  are  used  solely  and 
exclusively  for  religious  worship,  for  schools,  or  for  strictly  charitable  pur¬ 
poses,  also  cemeteries,  not  used  or  held  for  private  or  corporate  profit,  shall 
be  exempt  from  taxation,  unless  otherwise  provided  by  general  law. 

CONNECTICUT 

Hartford,  Oct.  2,  1915. — Dear  Sir:  Your  letter  of  the  29th  inst.  ad¬ 
dressed  to  Governor  Holcomb  has  been  referred  to  this  office  for  answer. 
The  Constitution  of  the  State  of  Connecticut  is  free  from  the  word  taxa¬ 
tion,  and  all  provisions  concerning  the  assessment  and  collection  of  taxes 
in  Connecticut  are  statutes  and  may  be  repealed  or  amended  at  any  ses¬ 
sion  of  the  legislature.  We  have  a  classification  of  property  for  taxa¬ 
tion  purposes,  it  being  optional  with  the  holder  of  intangible  personal 
property  as  to  whether  or  not  he  shall  pay  a  four-mill  tax  to  the  state 
or  the  local  tax  to  the  municipality  wherein  he  resides.  Different  kinds 
of  corporations  are  taxed  on  a  different  basis,  and  at  different  rates. 
WILLIAM  H.  CORBIN,  Tax  Commissioner. 

Connecticut  places  a  flat  rate  of  4  mills  per  annum  on  most  in¬ 
tangibles 'if  they  are  registered;  otherwise  they  are  subject  to  the 
general  local  tax  rate.  Mortgages  on  Connecticut  real  estate  are 
virtually  exempt;  bank  deposits  and  cash  are  exempt  to  the  amount 
of  $100;  saving  deposits  in  state  banks  are  exempt  to  holders  ;  the 
4-mill  tax  applies  to  all  taxable  deposits  not  otherwise  provided  for. 
A  careful  system  of  apportionment  of  revenues  between  the  state  and 
local  governments  has  been  worked  out.  This  information  is  supplied 
by  Mr.  William  H.  Corbin,  Tax  Commissioner  of  Connecticut.  With 
reference  to  recent  developments,  Mr.  Corbin,  at  the  fifth  session  of 


21 


PASS  THIS  COPY  ALONG,  AND  WRITE  FOR  ANOTHER  ONE. 


the  National  Tax  Association  Conference,  San  Francisco,  August, 
1915,  made  substantially  the  following  statements:  v 

A  law  was  passed  by  this  legislature  which  provides  that  when  inven¬ 
tories  of  estates  are  filed  with  the  tax  commission,  the  administrator 
must  file  also  an  affidavit  setting  forth  the  items  in  the  inventory  on 
which  taxes  were  paid,  or  were  assessed  for  taxation,  during  the  year 
previous  to  the  death  of  the  decedent;  and  I  think  we  have  now  some 
teeth  in  the  law.  If  those  taxes  have  not  been  paid  upon  the  property, 
there  shall  be  two  per  cent  per  annum  for  five  years  levied  upon  that 
estate,  which  will  be  a  ten  per  cent  penalty  tax,  and  I  think  they  would 
rather  pay  the  4  mills  tax  than  pay  a  ten  per  cent  penalty.  So  while  we 
have  not  had  any  teeth  in  the  law  before,  it  certainly  looks  as  if  we  were 
going  to  have  them  now,  and  we  have  been  receiving  on  the  volun¬ 
tary  method  about  $257,000,  which  is  certainly,  in  Connecticut,  worth 
finding. 

Vermont  adopted  a  law  two  or  three  years  ago  providing  for  taxation 
of  savings  deposits  by  a  system  permitting  the  national  banks  to  be 
taxed  on  the  deposits  and  therefore  exempting  local  depositors.  That 
was  taken  to  the  United  States  Supreme  'Court  and  the  court  upheld  the 
law  in  Vermont.  Now  in  Connecticut  this  last  year  the  legislature 
adopted  a  similar  law  which  provides  a  permissive  system  of  taxation 
[%  of  1  per  cent]  of  deposits  in  the  savings  departments  of  national 
banks,  but  the  part  of  the  law  which  is  compulsory,  and  which  has  not 
yet  been  tested  by  the  court,  is  that  the  national  banks  having  savings 
deposit  departments  must  submit — if  they  do  not  wish  to  come  under  the 
permissive  system — they  must  submit  to  the  assessors  in  the  different 
towns  a  list  of  the  depositors  in  their  departments  with  the  amounts,  and 
the  assessors  then  are  supposed  to  add  to  the  list  for  purposes  of  taxa¬ 
tion  the  amounts,  if  any,  which  appear  on  the  list  furnished  by  the 
banks,  which  are  not  shown  upon  the  individual  list  of  the  taxpayer. 
So  the  idea  is,  that  all  of  the  national  banks  in  Connecticut  having  .sav¬ 
ings  deposits  will  prefer  to  pay  this  small  tax  of  one-quarter  of  one  per 
cent  on  the  deposits  in  their  savings  departments  and  thus  exempt  the 
depositors  locally.  In  that  way  they  will  be  able  to  advertise  that  they 
are  on  the  same  basis  as  savings  banks,  which  do  pay  one-quarter  of 
one  per  cent  on  their  deposits,  with  certain  deductions,  and  whose  de¬ 
positors  are  exempt.  So  those  laws  are  quite  similar. 

DELAWARE 

Wilmington,  Oct.  18,  1915. — Dear  Sir:  I  find  upon  my  desk  after  my 
return  home  from  the  West,  a  letter  addressed  by  you  to  his  Excellency 
the  Governor  of  Delaware,  and  forwarded  to  me  by  him  for  reply.  I, 
for  years,  have  been  a  member  of  the  state  tax  commission  created  for 
the  purpose  of  straightening  out  our  tax  laws,  which  were  in  a  deplor¬ 
able  condition.  One  of  the  features  that  worked  to  our  advantage  was 
the  freedom  given  us  by  our  Constitution,  and  which  provision  I  have 
heard  eulogized  many  times  by  members  of  the  International  Tax  Asso¬ 
ciation,  of  which  I  was  also  a  member  for  a  number  of  years.  It  is  as 
follows: 

"All  taxes  shall  be  uniform  upon  the  same  class  of  subjects  within  the 
territorial  limits  of  the  authority  levying  the  tax,  and  shall  be  levied  and 
collected  under  general  laws,  but  the  General  Assembly  may,  by  general 
laws,  exempt  from  taxation  such  property  as  in  the  opinion  of  the  Gen¬ 
eral  Assembly  will  best  promote  the  public  welfare.” 

My  own  impression  from  personal  experience  is  the  freedom  given  by 
this  constitutional  act  is  most  desirable,  and  I  have  never  heard  of  any 
opposition  in  our  state  to  it;  it  is  fair  to  all  alike  and  makes  it  possible 


OO 


to  make  laws  in  accordance  with  the  requirements  of  the  state.  GEORGE 

W.  SPARKS. 

Constitutional  Provisions:  Article  VIII,  Sec.  1.  All  taxes  shall  be  uniform 
upon  the  same  class  of  subjects  within  the  territorial  limits  of  the  authority 
levying  the  tax,  and  shall  be  levied  and  collected  under  general  laws,  but  the 
General  Assembly  may,  by  general  laws,  exempt  from  taxation  such  property 
as  in  the  opinion  of  the  General  Assembly  will  best  promote  the  public  welfare. 

Article  X,  Sec.  3.  Provided,  That  *  *  *  all  real  and  personal  property 

used  for  school  purposes,  where  the  tuition  is  free,  shall  be  exempt  from  taxa¬ 
tion  and  assessment  for  public  purposes. 

GEORGIA 

Atlanta,  Oct.  12,  1915. — Dear  Sir:  Governor  Harris  directs  me  to  say 
that  the  present  Constitution  of  the  State  of  Georgia  was  adopted  in 
1877.  The  appellate  courts  have  decided  that  the  state  has  a  right  of 
classification  of  different  kinds  of  property  for  taxation,  though  the  rate 
of  ad  valorem  taxation  on  real  and  personal  property  must  be  uniform. 
Specific  taxes  must  be  uniform  on  subjects  of  the  same  class.  There 
have  been  no  recent  constitutional  amendments  submitted  to  our  people 
upon  the  subject  of  taxation,  and  the  present  status  of  the  Constitu¬ 
tion  seems  to  be  satisfactory  in  that  particular.  F.  R.  JONES,  Private 
Secretary. 

Constitutional  Provisions:  Article  IV,  Sec.  1,  Paragraph  1.  The  right  of 
taxation  is  a  sovereign  right,  inalienable,  indestructible,  is  the  life  of  the  state, 
.and  rightfully  belongs  to  the  people  in  all  republican  governments,  and  neither 
the  General  Assembly,  nor  any  nor  all  other  departments  of  the  government 
established  by  this  Constitution,  shall  ever  have  the  authority  to  irrevocably 
give,  grant,  limit,  or  restrain  this  right;  and  all  laws,  grants,  contracts,  and  all 
other  acts  whatsoever  by  said  government,  or  any  department  thereof,  to  effect 
any  of  these  purposes  shall  be,  and  are  hereby,  declared  to  be  null  and  void 
for  every  purpose  whatsoever,  and  said  right  of  taxation  shall  always  be  under 
the  complete  control  of,  and  revocable  by,  the  state,  notwithstanding  any  gift, 
grant,  or  contract  whatsoever  by  the  General  Assembly. 

Article  VII,  Sec.  2,  fll.  All  taxation  shall  be  uniform  upon  the  same  class  of 
subjects,  and  ad  valorem  on  all  property  subject  to  be  taxed  within  the  terri¬ 
torial  limits  of  the  authority  levying  the  tax,  and  shall  be  levied  and  collected 
under  general  laws.  The  General  Assembly  may,  however,  impose  a  tax  upon 
such  domestic  animals  as,  from  their  natyre  and  habits,  are  destructive  of 
property. 

112.  The  General  Assembly  may  by  law  exempt  from  taxation  all  public  prop¬ 
erty;  all  places  of  religious  worship  or  burial;  all  institutions  of  purely  public 
charity;  all  buildings  erected  for  and  used  as  a  college,  incorporated  academy, 
or  other  seminary  of  learning;  the  real  and  personal  estate  of  any  public  library, 
and  that  of  any  other  literary  association  used  by  or  connected  with  such 
library;  all  books  and  philosophical  apparatus;  and  all  paintings  and  statuary 
of  any  company  or  association  kept  in  a  public  hall  and  not  held  as  merchan¬ 
dise  or  for  purposes  of  sale  or  gain:  Provided,  That  the  property  so  exempted 
be  not  used  for  purposes  of  private  or  corporate  profit  or  income. 

IOWA 

Des  Moines,  Oct.  6,  1915. — Dear  Sir:  Replying  to  your  letter  of  Sep¬ 
tember  29,  directed  to  Governor  Clarke,  which  letter  has  been  referred 
to  the  writer,  who  has  direct  charge  of  the  tax  certification  and  records, 
I  have  to  say  that  our  state  does  impose  the  general  property  tax  and 
that  our  system  is  that  with  only  slight  modifications.  An  amendment 
was  proposed  by  the  Thirty-fifth  General  Assembly  to  the  Constitution 
providing  for  classification  of  different  kinds  of  property.  The  Thirty- 
sixth  General  Assembly,  the  approval  of  which  is  required  under  the  Con¬ 
stitution,  failed  to  approve  the  same,  consequently  it  died.  Our  provi¬ 
sion  in  the  Constitution  has  existed  from  the  adoption  of  the  Constitu¬ 
tion  in  1857.  There  is  a  growing  movement  in  the  state  in  favor  of  classi¬ 
fication  and  those  who  have  given  the  question  of  tax  much  thought  are 
generally  in  favor  of  such  an  amendment  to  our  Constitution.  Our  last 
General  Assembly  was  a  most  reactionary  body.  ******* 
************  It  is  probable  that  it  was  wise  that 
the  consideration  of  the  classification  amendment  be  deferred,  as  the 
sentiment  was  not  sufficiently  developed  to  have  enabled  its  friends  to 
have  it  adopted  at  the  polls  in  all  probability.  No  such  amendment  has 


23 


IT  TAKES  A  MAJORITY  OF  ALL  WHO  VOTE  IN  NOVEMBER  TO  ADOPT  THE  AMENDMENT. 


yet  been  voted  on  by  the  people.  Under  the  -conditions  existing  in  this 
state,  classification  is  most  certainly  desirable  as  a  means  of  equalizing 
the  burdens  of  government.  While  our  statutes  are  very  strict  as  to 
the  duty  of  assessors,  local  equalizing  boards  and  the  State  Board  of 
Review,  until  the  year  1913  no  real  effort  has  been  made  at  an  actual 
compliance  with  the  same,  although  on  a  former  occasion  the  matter 
was  considered  to  some  extent.  Governor  Clarke  has  not  indicated  his 
personal  opinion  as  to  the  matter  of  classification.  A.  H.  DAVISON, 
Secretary. 

Des  Moines,  Nov.  19,  1915. — Dear  Sir:  I  have  your  letter  of  November 
13  in  reference  to  the  Iowa  method  of  taxing  moneys  and  credits.  You 
ask  the  question,  “How  is  it  permissible  under  the  Iowa  Constitution 
to  tax  moneys  and  credits  at  the  rate  of  five  mills  on  the  dollar  of 
actual  value?”  *  *  *  It  has  been  the  practice  in  Iowa  and  in  other 
states  having  similar  constitutional  provisions  to  provide  for  special 
taxes  upon  different  classes  of  property,  of  course  to  be  made  avail¬ 
able  for  the  benefit  of  all  the  people  of  the  state.  *  *  *  This  statute 

undertakes  and  does  lay  a  uniform  tax  upon  this  kind  of  property  in  the 
hands  of  all  citizens  and  for  that  reason  would  seem  to  grant  no  special 
privileges  within  the  contemplation  of  the  Constitution.  However,  this 
statute  has  not  been  called  in  question  in  the  courts  and  possibly  there 
may  be  some  vulnerable  point  when  tested,  but  the  time  has  passed 
within  which  we  would  expect  the  matter  to  be  contested  if  lawyers 
deemed  the  same  vulnerable.  As  regards  the  success  of  the  statute  in 
this  state,  I  will  enclose  a  copy  of  a  letter  written  by  me  some  time  since 
upon  a  similar  request  from  A.  E.  Holcomb,  Treasurer  of  the  National 
Tax  Association,  which  I  think  covers  what  you  are  asking.  A.  H. 
DAVISON,  Secretary,  Executive  Council  of  Iowa. 

Mr.  Davison’s  statement  referred  to  in  his  letter  follows:  The  last 
valuation  where  moneys  and  credits  were  included  with  personal  property 
was  the  year  1911,  when  the  total  net  taxable  value  of  all  personal  prop¬ 
erty,  including  moneys  and  credits,  was  $134,452,985.  For  the  four  suc¬ 
ceeding  years  personal  property,  except  moneys  and  credits,  and  moneys 
and  credits  at  their  actual  value,  were  as  follows: 

Moneys  and  Credits. 


Personal 

Actual  Value 

1912. . 

. $  93,762,629 . 

. $188,773,775 

1913.  . 

.  101,848,015 . 

.  207,233,866 

1914.. 

.  110,698,770 . 

.  250,218,178 

1915. . 

.  112,736,012 . 

.  270,506,356 

The  figures  given  of  personal  property  are  net  taxable  values  or  twenty- 
five  per  cent  of  the  actual  values  returned,  while  the  moneys  and  credits 
values  given  for  the  four  years  are  the  actual  value  of  moneys  and  credits 
returned,  upon  which,  under  our  statute  enacted  by  the  Thirty-fourth  Gen¬ 
eral  Assembly,  we  levy  a  tax  of  five  mills  upon  each  dollar.  The  growth 
for  the  several  years  would  consist  of  the  total  personal  assessments  plus 
one-fourth  of  the  actual  value  of  the  moneys  and  credits.  My  belief  is 
that  this  growth  represents  very  much  more  than  the  growth  which  would 
have  naturally  resulted  had  we  not  separated  moneys  and  credits  from 
other  personal  property.  It  is  plain  to  be  seen  the  growth  on  other 
personal  property  from  1912  to  1915,  about  twenty-one  million  dollars 
taxable  value;  which,  of  course,  is  eighty  million  dollars  actual  value, 
while  the  growth  on  both  together,  adding  one-fourth  of  the  value  of 
moneys  and  credits  to  the  value  of  personal  property  for  1915,  is  about 
fifty  million  dollars.  The  figures,  however,  do  not  reveal  at  all,  in  my 
judgment,  the  actual  situation.  Our  people  are  not  yet  convinced  that 
the  legislature  may  not  at  any  time  repeal  the  low  rate  on  moneys  and 
credits  and  for  that  reason  the  man  who  has  the  moneys  and  credits 
is  fearful  to  be  honest  and  does  not  list  the  same  lest  he  will  reveal  his 
property  in  moneys  and  credits  and  the  law  be  repealed  and  then  he 


24 


thereafter  could  not  conceal  the  same  from  the  high  rates  under  the 
general  property  tax.  It  Is  my  judgment  further  that  as  soon  as  the  peo¬ 
ple  become  convinced  that  the  statute  will  not  be  repealed  that  the  list¬ 
ing  of  moneys  and  credits  will  be  greatly  increased.  I  do  not  undertake 
to  say  that  this  is  the  general  opinion,  but  I  believe  it  is  the  opinion 
of  those  who  have  the  most  to  do  with  taxation  matters. 

Constitutional  Provisions:  Article  III,  Sec.  30.  The  General  Assembly  shall 
not  pass  local  or  special  laws  for  the  assessment  and  collection  of  taxes  for 
state,  county,  or  road  purposes. 

Article  VIII,  Sec.  2.  The  property  of  all  corporations  for  pecuniary  profit 
shall  be  subject  to  taxation  the  same  as  that  of  individuals. 

KENTUCKY 

Frankfort,  Oct.  8,  1915. — Dear  Sir:  Your  letter  of  September  29,  ad¬ 
dressed  to  Hon.  J.  B.  McCreary,  Governor,  has  just  been  handed  to  me 
for" reply,  and  I  shall  answer  the  questions  as  best  I  can,  as  follows: 
1.  Our  State  Constitution  imposes  the  “general  property  tax,”  and  does 
not  permit  of  classification  of  different  kinds  of  property.  2.  The  pow¬ 
ers  given  the  General  Assembly  are  rather  limited.  3.  Our  present  Con¬ 
stitution  went  into  effect  in  1891.  4.  There  has  been  for  some  years  a 

pronounced  movement  looking  to  an  amendment  of  our  Constitution,  de¬ 
signed  to  give  the  legislature  broader  powers  in  the  direction  of  classifi¬ 
cation  of  property.  This  amendment  was  enacted  in  1912,  and  was  sub¬ 
mitted  to  a»  vote  of  the  people  in  1913,  with  the  result  that  the  amendment 
was  carried  by  a  majority  of  33,600.  It  was  afterwards  discovered  that 
the  Secretary  of  State  had  failed  to  properly  advertise  the  proposed 
amendment,  and  our  Court  of  Appeals,  in  the  case  of  McCreary,  Governor, 
vs.  Speer,  held  the  election  invalid.  However,  the  legislature  of  1914 
again  directed  the  amendment  submitted,  and  it  has  been  properly  ad¬ 
vertised  and  will  be  submitted  for  ratification  or  rejection  on  Nov.  2, 
1915.  I  have  heard  it  discussed  but  little,  so  cannot  venture  an  opinion 
as  to  the  outcome.  5.  I  am  sending  you  under  separate  cover  a  copy  of 
the  Report  of  our  Special  Tax  Commission  made  to  the  1914  General 
Assembly,  which,  I  believe,  will  afford  your  commission  some  considerable 
data  on  the  taxing  system  in  vogue  and  the  proposed  system.  Also  copy 
of  the  amended  section  of  our  Constitution  referred  to,  supra.  CHARLES 
H.  MORRIS,  Assistant  Attorney-General. 

The  amendment  was  adopted,  and  reads  as  follows : 

The  General  Assembly  shall  provide  by  law  an  annual  tax,  which,  with  other 
resources,  shall  be  sufficient  to  defray  the  estimated  expenses  of  the  common¬ 
wealth  for  each  fiscal  year.  Taxes  shall  be  levied  and  collected  for  public  pur¬ 
poses  only,  and  shall  be  uniform  upon  all  property  of  the  same  class  subject 
to  taxation  within  the  territorial  limits  of  the  authority  levying  the  tax;  and 
all  taxes  shall  be  levied  and  collected  by  general  laws. 

The  General  Assembly  shall  have  power  to  divide  property  into  classes  and 
to  determine  what  class  or  classes  of  property  shall  be  subject  to  ‘local  taxa¬ 
tion.  Bonds  of  the  state  and  of  counties,  municipalities,  taxing  and  school  dis¬ 
tricts  shall  not  be  subject  to  taxation. 

Any  law  passed  or  enaeted  by  the  General  Assembly  pursuant  to  the  pro¬ 
visions  of  or  under  this  Amendment  or  amended  section  of  the  Constitution, 
classifying  property  and  providing  a  lower  rate  of  taxation  on  personal  prop¬ 
erty,  tangible  or  intangible,  than  upon  real  estate,  shall  be  subject  to  the 
referendum  power  of  the  people,  which  is  hereby  declared  to  exist  to  apply  only 
to  this  section,  or  amended  section.  The  referendum  may  be  demanded  by  the 
people  against  one  or  more  items,  sections  or  parts  of  any  act  enacted  pursuant 
to  or  under  the  power  granted  by  this  Amendment,  or  amended  section.  The 
referendum  petition  shall  be  filed  with  the  Secretary  of  State  not  more  than 
four  months  after  the  final  adjournment  of  the  Legislative  Assembly,  which 
passed  the  bill  on  which  the  referendum  is  demanded.  The  veto  power  Of  the 
Governor  shall  not  extend  to  measures  referred  to  the  people  under  this  sec¬ 
tion.  All  elections  on  measures  referred  to  the  people  under  this  act  shall  be 
at  the  Regular  general  elections,  except  when  the  Legislative  Assembly  shall 
order  a  special  election.  Any  measure  referred  to  the  people  shall  take  effect 
and  become  a  law  when  approved  by  the  majority  of  the  votes  cast  thereon, 
and  not  otherwise.  The  whole  number  of  votes  cast  for  the  candidates  for 
Governor  at  the  regular  election  last  preceding  the  filing  of  any  petition  shall 
be  the  basis  upon  which  the  legal  voters  necessary  to  sign  such  petition  shall 
be  counted.  The  power  of  the  referendum  shall  be  ordered  by  the  Legislative 


25 


Assembly  at  any  time  any  acts  or  bills  are  enacted,  pursuant  to  the  power 
granted  under  this  section  or  amended  section,  prior  to  the  year  ,of  one  thou¬ 
sand  nine  hundred  and  seventeen.  After  that  time,  the  power  of  the  referen¬ 
dum  may  be  ordered  either  by  the  petition  signed  by  five  per  cent  of  the  legal 
voters  or  by  the  Legislative  Assembly  at  the  time  said  acts  or  bills  are  enacted. 
The  General  Assembly  enacting  the  bill  shall  provide  a  way  by  which  the  act 
shall  be  submitted  to  the  people.  The  filing  of  a  referendum  petition  against 
one  or  more  items,  sections  or  parts  of  an  act  shall  not  delay  the  remainder 
of  that  act  from  becoming  operative. 

MARYLAND 

Constitutional  Provisions:  Declaration  of  rights:  Article  XIV.  That  no  aid, 
charge,  tax  burthen,  or  fees  ought  to  be  rated,  or  levied,  under  any  pretense, 
without  the  consent  of  the  legislature. 

Article  XV.  [As  amended  November  2,  1915.]  That  the  levying  of  taxes  by 
the  poll  is  grievous  and  oppressive  and  ought  to  be  prohibited;  that  paupers 
ought  not  to  be  assessed  for  the  support  of  the  government;  that  the  General 
Assembly  shall,  by  uniform  rules,  provide  for  separate  .assessment  of  land  and 
classification  and  sub-classifications  of  improvements  on  land  and  personal 
property,  as  it  may  deem  proper;  and  all  taxes  thereafter  provided  to  be  levied 
by  the  state  for  the  support  of  the  general  state  government,  and  by  the  coun¬ 
ties  and  by  the  City  of  Baltimore  for  their  respective  purposes,  shall  be  uni¬ 
form  as  to  land  within  the  taxing  district,  and  uniform  within  the  class  or  sub¬ 
class  of  improvements  on  land  and  personal  property  which  the  respective  tax¬ 
ing  powers  may  have  directed  to  be  subjected  to  the  tax  levy;  yet  fines,  duties 
or  taxes  may  properly  and  justly  be  imposed,  or  laid  with  a  political  view  for 
the  good  government  and  benefit  of  the  community. 

Secretary  Allan  C.  Girdwood,  of  the  State  Tax  Commission  of 
Maryland  (1915),  in  a  report  on  "Taxation  of  Intangible  Personal 
Property  in  Maryland,”  says : 

It  is  sufficient  to  state  that  economists  and  students  of  taxation  and 
administrators  all  agree  that  the  general  property  ta|c  cannot  be  imposed 
on  all  kinds  of  property  alike.  Attempts  to  do  so  have  discredited  the 
general  property  tax  system  throughout  the  United  States. 

To  impose  the  same  tax  on  all  kinds  of  property  tends  to  inequality, 
says  the  Supreme  Court  of  the  United  States. 

I  know  of  no  community  in  this  country  where  the  general  property 
tax  has  been  imposed  upon  money,  credits  and  intangible  evidences  of 
wealth  at  the  same  rate  as  on  real  and  tangible  personal  property,  with 
any  degree  of  success. 

The  failure  to  tax  this  kind  of  wealth  under  the  guise  of  the  general 
property  tax  gave  force  to  the  two  methods  which  have  been  pursued  in 
the  states. 

First — By  means  of  an  income  tax,  and 

Second — By  imposing  a  low  uniform  rate  or  tax  upon  property  within 
the  class,  the  rate  being  fixed  with  the  view  of  a  reasonable  payment  out 
of  the  income  from  the  investment. 

Each  of  these  methods  has  its  friends.. 

It  is  high  praise  given  by  Professor  Bullock  of  Harvard  when  he  says : 

“The  experience  of  Pennsylvania  and  Maryland  under  imperfect  laws 
and  with  imperfect  methods  of  administration  should  lead  to  a  revision 
of  the  opinion  that  it  is  impossible  to  collect  any  sort  of  a  tax  on  in¬ 
tangible  wealth.  Is  it  not  possible  that  these  commonwealths  have  found 
a  practical,  if  not  an  ideal,  method  of  removing  the  worst  evils  in  Amer¬ 
ican  state  and  local  taxation?" 

The  Maryland  act  was  passed  over  eighteen  years  ago,  at  the  January 
Session  of  1896,  and  went  into  effect  the  following  yeaf ;  it  provided  for  a 
uniform  rate  of  30  cents  for  local  purposes,  plus  the  direct  state  general 
property  rate,  which  at  that  time  was  17%  cents.  It  is  very  important 
to  know  what  is  affected  by  its  terms.  The  law  provided  that  “all  bonds 
and  certificates  of  indebtedness  issued  by  corporations  and  stocks  of 
foreign  corporations”  are  within  the  purview  of  the  law,  but  only  on  con¬ 
dition  that  interest  is  paid  within  the  year.  Shares  of  Maryland  cor¬ 
porations,  ordinary  mortgages,  book  accounts  of  merchants,  savings  ac- 


26 


counts,  are  not  included  within  the  classification  in  Maryland,  hut  are 
included  in  other  states.  State,  county  and  municipal  stocks  are  not  now 
included.  This  tax  is  not  imposed  upon  the  holdings  of  this  classified 
property  held  by  savings  banks,  because  of  the  annual  franchise  tax  of 
25  cents  on  each  $100  of  deposits  (without  any  credits  or  allowances) 
which  is  paid  by  savings  banks.  Further,  it  has  not  been  imposed  upon 
the  holdings  of  domestic  corporations  having  investments  in  the  class, 
because  these  are  supposed  to  be  represented  in  the  value  of  the  shares. 

Prior  to  1914  the  tax  against  the  shares  of  all  banks  and  Maryland  cor¬ 
porations  was  at  the  state  rate  and  full  local  rate  prevailing  at  the  resi- 
>  dences  of  the  shareholders.  Under  provision  of  an  act  passed  in  1914, 
ordinary  business  corporations  pay  taxes  on  real  and  tangible  personal 
property  like  an  individual,  and,  in  addition,  an  annual  franchise  tax  on 
the  amount  of  outstanding  capital.  Corporations  other  than  ordinary 
business  corporations  will  pay  the  full  rate  on  shares  as  heretofore;  ex¬ 
cept  banks,  which  have  now  been  put  within  the  1  per  cent  Bank  Act. 
Hereafter  ordinary  business  corporations  will  pay  the  tax  on  their  hold¬ 
ings  of  this  class  of  property  at  the  low  rate. 

Prior  to  1904  mortgages  were  taxed  in  Maryland  at.  a  rate  of  8  per 
cent  per  annum  on  the  interest  covenanted  by  the  mortgage  to  be  paid. 

,  The  act  has  been  repealed  in  all  but  four  counties.  Experience  in  Mary¬ 
land  in  taxing  mortgages  demonstrates  to  my  mind  conclusively  that  a 
mortgage  tax  or  a  mortgage  recording  tax  is  paid  by  the  borrower  and 
not  by  the  investor. 

I  make  these  explanations  in  order  that  you  may  understand  how  lim¬ 
ited  in  scope  is  the  application  of  the  rate,  and  yet  I  believe  each  of  the 
limitations  is  sound  and  reasonable.  With  these  exceptions  clearly  under¬ 
stood,  I  believe  I  can  truthfully  say  that  the  success  attending  the  admin¬ 
istration  of  the  low  rate  of  taxation  on  intangible  personal  property  in 
Maryland  is  far  more  creditable  than  writers  on  this  subject  have  given' 
credit. 

Heretofore  the  Maryland  law  has  had  one  weak  feature — as  the  rate 
on  the  security  was  not  fixed  and  constant — because  the  total  rate  was 
the  aggregate  of  the  uniform  local  rate  of  30  cents  ahd  the  state  rate 
on  property.  The  latter  was  variable.  At  the  time  of  the  passage  of  the 
act  the  state  rate  was  17%  cents,  consequently  the  rate  against  this  class 
of  property  was  47%  cents  on  $100. 

Between  1897  and  1914  the  state  rate  has  varied  between  the  mini¬ 
mum  of  16  cents  and  the  maximum,  attained  in  1913  and  1914,  of  31 
cents.  The  highest  rate  consequently  has  been  61  cents  on  $100  of  valua¬ 
tion.  Under  an  act  passed  by  the  last  legislature  the  rate  for  state  pur¬ 
poses  was  classified,  and  now  the  rate  imposed  on  this  class  everywhere 
is  45  cents,  of  which  15  cents  is  for  the  use  of  the  state  and  30  cents 
for  the  use  of  the  locality,  divided  further  as  regards  the  local  rate  in 
case  the  holder  resides  in  an  incorporated  city,  town  or  village,  having 
a  separate  rate  in  addition  to  the  county  rate.  Attempt  was  made  in  the 
legislature  of  1904  by  persons  who  desired  to  discredit  taxation  of  in¬ 
tangible  property,  to  repeal  this  law.  This  attempt  was  quickly  de¬ 
feated  as  soon  as  the  results  of  eight  years’  successful  application  of  the 
law  had  been  demonstrated.  Since  then  there  has  been  no  further  at¬ 
tempt  to  repeal  the  law. 

At  the  conclusion  of  his  report,  Mr.  Girdwood  presents  a  table 
t  showing  the  “assessment  of  interest-paying  bonds,  certificates  of  in¬ 
debtedness,  stocks  of  foreign  corporations  (subject  to  the  30-cent  local 
rate)  in  Baltimore  City,”  i.  e.,  the  face  value  of  these  securities  re¬ 
turned  for  taxation  each  year  from  1896  to  1915,  inclusive. 

The  following  table  presents  these  figures  for  1896 — the  last  year 
of  attempted  assessment  under  the  general  property  tax;  1897,  the 
first  year  of  taxation  under  the  classified  tax,  and  1915,  the  latest  date 


27 


IF  YOU  WANT  TAX  REVISION,  VOTE:  “YES.* 


for  which  figures  are  available ;  and  also  a  computation  of  the  revenues 
derived  from  this  source  at  the  rate  which  maintained  in  each  of  these 
years : 


Year.  Valuation.  Rate  per  $100.  Revenue. 

1896  . $  6,000,000  $2.17%  $130,650 

1897  .  58,703,795  .47%  280,310 

1915 .  208,431,712  .45  937,942 


MASSACHUSETTS 

Boston,  Nov.  26,  1915. — Dear  Sir:  This  commonwealth  does  impose  ^ 
a  general  property  tax  on  all  kinds  of  property  except  such  kinds  as  are 
taxed  under  the  so-called  “excise  clause”  of  the  Constitution.  Tfie 
property  tax  clause  has  been  embodied  in  the  State  Constitution  since  it 
was  originally  enacted  in  1780.  I  believe,  also,  that  it  came  down  from 
former  Province  law^s  and  has  been  on  the  statute  books  some  thrfee  hun¬ 
dred  years.  An  amendment  voted  on  by  the  Body  Politic  Nov.  2,  which 
would  allow  the  legislature  to  enact  laws  concerning  income  taxation, 
was  passed  by  a  vote  of  269,748  in  favor  and  98,093  against.  We  do  favor 
giving  the  legislature  broad  powers,  but  you  will  notice  that  the  article 
is  a  restricted  one.  Another  amendment  to  the  Constitution  passed  the 
last  legislature  and  will  come  up  to  the  present  legislature  this  coming 
winter  and  if  enacted  would  open  wide  the  door  for  any  kind  of  revision 
in  tax  laws.  This  latter  amendment  would  strike  out  from  the  Constitu¬ 
tion  the  word  “proportional.”  JOHN  W.  LOCKE,  Deputy  Tax  Com¬ 
missioner. 

Boston,  Oct.  26,  1915. — Dear  Sir:  The  Constitution  of  Massachusetts 
does  impose  the  general  property  tax  system.  It  does  not  give  powers  of 
discrimination  to  the  legislature  in  the  taxing  of  property.  -It  does, 
however,  give  some  powers  of  discrimination  to  the  legislature  in  impos¬ 
ing  special  taxes  upon  privileges.  Under  this  power  the  legislature  has 
imposed  separate  and’  distinct  taxes  on  domestic  corporations,  legacies 
and  successions,  savings  banks,  foreign  corporations  doing  business  in 
Massachusetts  and  insurance  companies.  The  revenue  derived  from  these 
special  taxes  it  not  exceeding  20  per  cent  of  the  total  revenue  raised  in 
the  state  and  with  relation  to  the  other  80  per  cent  it  is  to  be  said  that 
this  is  raised  under  the  general  property  tax.  The  general  property  tax 
has  been  the  backbone  of  our  revenue  system  since  colonial  times.  There 
is  before  the  people  for  their  approval  next  week  a  constitutional 
amendment  giving  power  to  the  legislature  to  classify  property,  to  tax 
its  income,  and  to  exempt  from  other  taxation  property  the  income  of 
which  is  taxed.  This  amendment  has  been  favorably  acted  upon  by  two 
successive  legislatures,  and  so  far  as  we  are  able  to  discover,  there  is 
no  organized  opposition  to  it.  The  only  amendment  to  the  Constitution 
relative  to  taxation  which  has  been  voted  upon  by  the  people  in  recent 
years  is  an  amendment  which  was  approved  by  them  in  1913  or  1914, 
permitting  the  classification  of  forest  property.  We  now  have  as  a  re¬ 
sult  of  this  amendment  an  excellent  law  for  the  taxation  of  forests  and 
forest  lands.  In  my  judgment,  there  is  the  greatest  necessity  for  the 
adoption  of  the  Constitutional  Amendment  now  before  the  people.  I 
think  it  does  not  make  much  difference  whether  a  given  state  shall  adopt 
an  amendment  allowing  classification  of  property  to  be  taxed  at  a  low 
flat  rate,  or  an  amendment  allowing  classification  of  property  to  be 
taxed  upon  the  basis  of  the  income  produced  by  it.  The  result  can  be 
brought  out  to  be  substantially  the  same  in  both  cases.  Which  method  of 
amendment  should  be  adopted  in  a  given  state  would  be  determined  by 
local  conditions.  As  a  matter  of  fact,  in  Massachusetts  it  is  either  an 
Income  tax  amendment  or  nothing,  for  a  good  long  time.  In  my  judgment 
there  is  little,  if  any,  justification  for  any  American  state  to  refrain 
longer  from  giving  to  its  legislature  either  power  to  classify  or  power  to 
tax  Inturns  of  income.  The  teaching  gained  from  the  experience  of  every 
state  is  conclusive.  Without  such  a  power  either  to  classify  or  to  tax 


28 


income,  the  legislature  cannot  make  the  fundamental  distinctions  and 
discriminations  between  classes  of  property  which  are  in  no  economic 
sense  alike.  Until  the  legislature  is  given  power  to  make  such  distinc¬ 
tion,  confusion  and  injustice  in  taxation  will  exist  to  an  unwarranted  ex¬ 
tent. — CHAS.  A.  ANDREWS,  President,  Massachusetts  Tax  Association, 
and  Former  Deputy  Tax  Commissioner. 

Constitutional  Provision,  adopted  November  2,  1915.  Full  power  and  author¬ 
ity  are  hereby  given  and  granted  to  the  general  court  to  impose  and  levy  a 
tax  on  income  in  the  manner  hereinafter  provided.  Such  tax  may  be  at  differ¬ 
ent  rates  upon  income  derived  from  different  classes  of  property,  but  shall  be 
levied  at  a  uniform  rate  throughout  the  commonwealth  upon  incomes  derived 
from  the  same  class  of  property.  The  general  court  may  tax  income  not  de¬ 
rived  from  property  at  a  lower  rate  than  income  derived  from  property,  and 
may  grant  reasonable  exemptions  and  abatements.  Any  class  of  property  the 
income  from  which  is  taxed  under  the  provisions  of  this  article  may  be  ex¬ 
empted  from  the  imposition  and  levying  of  proportional  and  reasonable  as¬ 
sessments,  rates  and  taxes  as  at  present  authorized  by  the  Constitution.  This 
article  shall  not  be  construed  to  limit  the  power  of  the  general  court  to  impose 
and  levy  reasonable  duties  and  excises. 

At  the  fifth  session  of  the  National  Tax  Association’s  Ninth  Annual 
Conference,  held  in  San  Francisco,  August,  1915,  Mr.  Charles  A. 
Andrews  of  Massachusetts,  whose  letter  appears  above,  spoke  substan¬ 
tially  as  follows  of  the  effort  made  to  relieve  some  of  the  general 
property  tax  inequities  in  Massachusetts  prior  to  the  adoption  of  the 
recent  amendment  to  the  Constitution  of  that  state : 

May  I  cite  a  very  interesting  experiment  that  Massachusetts  has  just  " 
tried?  We  have  a  cast-iron  Constitution  which  prohibits  us  from  making 
any  distinction  between  classes  of  property  in  matters  of  taxation.  By 
an  act  of  1914  the  legislature  provided,  however,  that  mortgage  bonds 
might  be  registered  with  the  tax  commissioner  upon  payment  of  a  fee 
of  three  dollars  a  thousand,  and  the  bonds  be  exempted  from  local  taxa¬ 
tion  for  a  year  after  the  date  of  registration.  There  was  grave  doubt 
as  to  whether  it  was  constitutional,  but  yet  in  the  three  months  of  Janu¬ 
ary,  February  and  March,  1915,  $27,000,000  worth  of  bonds  were  brought 
into  our  office  and  registered  and  the  three-dollar-tax  was  paid,  despite 
the  fact  that  many  people  believe  the  registration  act  was  unconstitu¬ 
tional.  Of  course,  registration  stopped  on  the  first  day  of  April,  because 
there  was  no  good  of  registering  on  the  second  or  third  days  of  April  to 
get  a  tax  exemption  working  on  the  first  of  April,  1916.  *  *  *  If  it 

is  resumed  it  will  be  resumed  in  January,  February  and  March  of  next 
year;  but  in  the  meantime  the  legislature  of  Massachusetts  asked  cer¬ 
tain  questions  of  the  Supreme  Court  of  Massachusetts  in  May,  1915,  re¬ 
lating  to  the  principle  of  exemption  by  registration,  and  the  court  in  its 
reply  said  practically  that  exemption  of  property  from  taxation  by  regis¬ 
tering  it  and  paying  a  small  fee  is  no  good  in  Massachusetts.  The  regis¬ 
tration  act  of  1914  is  still  in  force.  It  has  not  been  declared  unconstitu¬ 
tional.  *  *  *•  But  the  court  has  said  that  that  principle  is  no  good 
in  Massachusetts.  It  probably  will  result,  therefore,  that  in  next  January, 
February  and  March  there  will  not  be  presented  $27,000,000  worth  or 
any  other  appreciable  amount  of  securities.  This  brings  us  squarely  up 
to  the  point  that  if  we  are  going  to  have  any  decent  and  reasonable  taxa¬ 
tion  of  securities  in  Massachusetts  we  can  have  it  only  by  constitutional 
amendment. 

MICHIGAN 

Detroit,  Nov.  6,  1915. — Dear  Sir:  I  have  your  letter  of  November  5,  to¬ 
gether  with  copy  of  form  letter  sent  to  the  governors  of  the  various 
states  requesting  information  concerning  the  Constitution  and  laws  re¬ 
lating  to  the  subjects  of  taxation.  I  am  just  about  to  leave  the  city  for 
several  days,  and  will,  therefore,  endeavor  to  answer  the  questions  you 
ask  right  away.  Our  State  Constitution  permits  the  classification  of 
property  for  purposes  of  taxation  and  gives  the  legislature  quite  broad 


29 


SILENCE  IS  A  VOTE  TO  KEEP  THE  PRESENT  TAX  SYSTEM. 


powers  to  enact  laws  relating  to  the  subject  of  taxation.  This  revised 
Constitution  was  adopted  by  the  people  in  1908,  our  Constitutional  Con¬ 
vention  having  met  in  1907.  Since  that  time  the  legislature  has  enacted 
laws  providing  for  a  specific  tax  on  certain  forms  of  credits’,  such  as 
mortgages  and  bonds.  These  laws  have  proven  quite  satisfactory  to 
the  people  of  our  state.  We  have  also  enacted  a  law  providing  for  a 
specific  tonnage  on  vessel  property  in  place  of  the  old  ad  valorem  tax. 
Personally,  I  am  very  much  in  favor  of  a  classification  of  property  for 
purposes  of  taxation  and  I  wish  it  were  possible  for  every  state  to  pro¬ 
vide  for  such  classification  in  its  'Constitution.  So  long  as  the  states  per¬ 
sist  in  following  the  old  general  property  tax  system  in  the  assessment 
of  property,  so  long  will  the  larger  part  of  personal  property  escape  taxa¬ 
tion  entirely.  There  is  only  one  way  to  reach  intangible  personalty  and 
that  is  to  enact  legislation  providing  for  a  reasonable  tax.  Where  the 
tax  imposed  eats  up  the  larger  part  of  the  income  derived  from  the 
property  very  little  of  that  kind  of  property  ever  ’reaches  the  assessment 
rolls.  The  result  is  that  the  owners  of  real  property  have  to  bear  an 
extra  burden.  I  sincerely  hope  that  the  good  people  of  the  State  of 
Illinois  will  fall  in  line  with  the  other  progressive  states  in  this  matter 
and  adopt,  by  an  overwhelming  vote,  the  amendment  to  the  State  Con¬ 
stitution  which  your  federation  has  been  working  so  hard  for.  GEO. 
LORD,  Secretary,  Michigan  State  Tax  Association. 

Constitutional  Provisions:  Article  X,  Sec.  3.  The  legislature  shall  provide 
by  law  a  uniform  rule  of  taxation,  except  on  property  paying  specific  taxes, 
and  taxes  shall  be  levied  on  such  property  as  shall  be  prescribed  by  law: 
Provided,  That  the  legislature  shall  provide  by  law  a  uniform  rule  of  taxation 
for  such  property  as  shall  be  assessed  by  a  State  Board  of  Assessors,  and  the 
rate  of  taxation  on  such  property  shall  be  the  rate  which  the  State  Board  of 
Assessors  shall  ascertain  and  determine  is  the  average  rate  levied  upon  other 
property  upon  which  ad  valorem  taxes  are  assessed  for  state,  county,  township, 
school,  and  municipal  purposes. 

Sec.  4.  The  legislature  may  by  law  impose  specific  taxes,  which  shall  be 
uniform  upon  the  classes  upon  which  they  operate. 

Sec.  5.  The  legislature  may  provide  by  law  for  the  assessment  at  its  true 
cash  value  by  a  State  Board  of  Assessors,  of  which  the  Governor  shall  be  ex- 
offcio  a  member,  of  the  property  of  corporations  and  the  property,  by  whom¬ 
soever  owned,  operated,  or  conducted,  engaged  in  the  business  of  transporting 
passengers  and  freight,  transporting  property  by  express,  operating  any  union 
station  or  depot,  transmitting  messages  by  telephone  or  telegraph,  loaning  cars, 
operating  refrigerator  cars,  fast  freight  lines,  or  othef  car  lines,  and  running 
or  operating  cars  in  any  manner  upon  railroads,  or  engaged  in  any  other  public 
service  business;  and  for  the  levy  and  collection  of  taxes  thereon. 

The  following  is  from  an  address  by  Joseph  E.  Davies,  Commis¬ 
sioner  of  Corporations,  Washington,  D.  C.,  on  “Tax  Legislation  En¬ 
acted  and  Constitutional  Amendments  Adopted  and  Pending  During 
1913.”  The  address  will  be  found  in  the  proceedings  of  the  National 
Tax  Association,  1913,  page  96,  under  the  heading  of  “Secured 
Debts”  and  “Mortgage  Recording”  taxes  Mr.  Davies  said : 

During  the  present  year  Michigan  has  extended  the  method  of  com¬ 
muting  taxes  on  certain  classes  of  intangible  personalty  through  the 
“Secured  Debts”  Law.  In  1911  this  state  adopted  the  New  York  “Mort¬ 
gage  Recording  Tax”  Law,  under  which  bonds  and  other  obligations 
secured  by  Michigan  realty  mortgages  on  which  the  recording  tax  has 
been  paid  are  exempt  from  all  other  taxation.  The  “Secured  Debts  Tax” 
Law,  also  adopted  from  New  York,  provides  a  tax  of  one-half  of  one 
per  cent  upon  the  face  value  of  bonds,  notes  and  other  debts  secured  by 
mortgages  of  property  in  any  state  other  than  Michigan,  or  upon  un¬ 
secured  serial  bonds,  debentures  or  notes  not  payable  within  one  year 
and  not  issued  for  an  amount  exceeding  $1,000  each.  This,  like  the  Mort¬ 
gage  Recording  Tax,  when  paid  once  exempts  such  debts  from  all  general 
taxation  in  Michigan. 


80 


MINNESOTA 


St.  Paul,  Oct.  11,  1915. — Dear  Sir:  Yours  of  September  30,  addressed 
to  Governor  W.  S.  Hammond,  and  asking  for  certain  information  as  to 
the  Minnesota  tax  system,  has  been  turned  over  to  this  commission  for 
reply.  The  State  Constitution  in  1906  was  amended  by  a  vote  of  the 
people  so  as  to  permit  the  classification  of  property  for  taxation  pur¬ 
poses.  This  amendment  provides  that  “Taxes  shall  be  uniform  upon  the 
same  class  of  subjects.”  The  1913  legislature  enacted  what  is  known  as 
the  “classified  assessment  law”  (Chapter  483,  Laws  1913),  in  conformity 
with  this  amendment.  MINNESOTA  TAX  COMMISSION,  Henry  A.  S. 
Ives,  Secretary. 

Constitutional  Provisions:  Article  IX,  Sec.  1.  The  power  of  taxation  shall 
never  be  surrendered,  suspended,  or  contracted  away.  Taxes  shall  be  uniform 
upon  the  same  class  of  subjects,  and  shall  be  levied  and  collected  for  public 
purposes,  but  public  burying  grounds,  public  schoolhouses,  public  hospitals, 
academies,  colleges,  universities,  and  all  seminaries  of  learning,  all  churches, 
church  property  used  for  religious  purposes,  and  houses  of  worship,  institutions 
of  purely  public  charity,  and  public  property  used  exclusively  for  any  public 
purpose,  shall  be  exempt  from  taxation,  and  there  may  be  exempted  from  taxa¬ 
tion  personal  property  not  exceeding  in  value  $200,  for  each  household,  individ¬ 
ual,  or  head  of  a  family,  as  the  legislature  may  determine. 

Article  IV,  Sec.  82a.  Any  law  providing  for  the  repeal  or  amendment  of  any 
law  or  laws  heretofore  or  hereafter  enacted,  which  provides  that  any  railroad 
company  now  existing  in  this  state,  or  operating  its  road  therein,  or  which  may 
be  hereafter  organized,  shall  in  lieu  of  all  other  taxes  and  assessments  upon 
their  real  estate,  roads,  rolling  stock,  and  other  personal  property,  at  and  dur¬ 
ing  the  time  and  periods  therein  specified,  pay  into  the  treasury  of  this  state 
a  certain  percentage  therein  mentioned  of  the  gross  earnings  of  such  railroad 
companies  now  existing  or  hereafter  organized,  shall,  before  the  same  shall 
take  effect  or  be  in  force,  be  submitted  to  a  vote  of  the  people  of  the  state  and 
be  adopted  and  ratified  by  a  majority  of  the  electors  of  the  state  voting  at  the 
election  at  which  the  same  shall  be  submitted  to  them. 

[From  the  Report  of  tbe  Minnesota  Tax  Commission,  1914] 

Money  and  credits  have  always  been  subject  to  taxation  in  Minne-  ^ 
sota.  Prior  to  1911  the  state  attempted  to  tax  such  property  on  the  same 
basis  and  at  the  same  rate  as  other  classes  of  personal  property.  The 
attempt  to  do  so,  however,  was  never  even  measurably  successful. 

*  *  *  In  1910,  the  last  year  under  the  old  method  of  assessment,  the 

amount  of  money  and  credits  returned  for  taxation  represented  less  than 
3  per  cent  of  the  estimated  value  of  such  property  owned  by  citizens  of 
the  state.  *  *  *  No  state  has  ever  yet  succeeded  in  reaching  intan¬ 

gible  personal  property  for  purposes  of  taxation  when  the  same  rate 
was  applied  to  it  as  to  tangible  personal  property.  It  was  scarcely  to  be 
expected  that  Minnesota  could  succeed  in  doing  that  which  other  states 
had  failed  to  do.  *  * 

Realizing  the  complete  failure  of  the  general  property  tax  when  ap¬ 
plied  to  intangibles,  the  legislature  in  1911  *  *  *  enacted  the  three- 

mill  tax  law.  It  was  felt  that  a  low  flat  tax  rate  would  result  in  placing 
a  large  amount  of  this  class  of  property  on  the  tax  rolls  that  had  here¬ 
tofore  escaped  taxation  entirely,  and  that  eventually  the  low  rate  would  r 
produce  more  revenue  than  the  old  system  had  done  because  of  the  in¬ 
creased  amount  listed.  In  addition,  itiwas  felt  that  the  new  law  would 
reduce  the  premium  on  dishonesty  and  permit  men  to  be  truthful  *  *  * 

without  fear  of  having  their  property  confiscated  in  excessive  tax  rates. 

These  conclusions  have  been  fully  justified  by  results.  The  value  of 
this  class  of  property  returned  for  taxation  in  1910,  the  last  year  under 
the  old  method  of  taxing  it,  was  less  than  $14,000,000,  while  this  year 
the  amount  listed  for  taxation  exceeds  $196,500,000,  an  increase  of  more 
than  1300  per  cent  in  four  years.  In  1910  only  6,200  assessments  of  this 
class  of  property  were  returned,  while  this  year  the  assessments  num¬ 
bered  73,266,  an  increase  of  more  than  1,081  per  cent  in  the  number  of 
persons  assessed. 

*  *  *  The  revenue  now  derived  from  the  three-mill  tax  is  consid¬ 

erably  larger  than  the  amount  collected  under  the  old  method  of  taxa¬ 
tion.  The  tax  levied  on  this  class  of  property  in  1910  was  a  little  in 


31 


r  excess  of  $379,000,  while  this  year  it  will  amount  to  about  $589,000,  an 
Increase  of  nearly  $210,000,  or  55  per  cent,  in  the  four  years  of  the  new 
law.  Every  county  in  the  state  is  now  getting  more  revenue  from  the 
three-mill  tax  than  under  the  old  law.  In  addition,  the  burden  of  the 
tax  is  much  more  widely  and  equitably  distributed, than  it  was  under  the 
old  system.  In  1910  the  ratio  of  persons  assessed  for  money  and  credits 
J  to  other  personal  property  assessments  was  1  in  48,  and  these  mostly 
I  widows  and  orphans,  while  in  1914  the  ratio  was  1  for  money  and  credits 
to  every  4*4  for  other  personal  property.  In  other  words,  in  1910,  out  of 
every  48  persons  assessed  for  personal  property  in  the  state,  cmly  one 
was  assessed  for  money  or  credits,  while  in  1914  one  out  of  every  4 ya 
persons  assessed  made  a  return  of  such  property. 

On  page  67  the  foregoing  report  presents  the  following  table  in  relation 
s.  to  an  assessement  of  money  and  credits,  1910-1914: 


“Money,”  as  defined  in  the  law,  includes  all  forms  of  currency  in  common 
use,  whether  in  hand  or  on  deposit  in  a  bank.  “Credits”  include  book  accounts, 
bills  receivable,  promissory  notes,  bonds,  rents,  annuities,  land  contracts  and 
mortgages  not  recorded  in  this  state,  and  all  other  claims  or  demands  for 
money  or  other  valuable  thing. 


Year. 

1910. 

1911. 

1912. 

1913. 

1914. 


Persons 
Assessed. 
. .  6,200 
..41,439 
..50,564 
. .57,068 
. .73,266 


Total 

Assessment. 
$  13,919,806 
115,481,807 
135,369,314 
156,969,892 
196,548,307 


Total  Taxes. 
$379,754.58 
347,028.38 
406,107.94 
470,909.67 
•689,644.92 


The  money  of  banks  and  of  corporations  subject  to  the  gross  earnings 
tax,  state  and  municipal  bonds  issued  subsequent  to  the  passage  of  the 
law,  and  mortgages  on  property  in  this  state  upon  which  the  Mortgage 
Registry  Tax  has  been  paid,  are  exempt,  from  the  three-mill  tax. 

The  assessment  is  to  be  made  at  the  fair  cash  value  of  the  property, 
and  not  at  a  percentage  of  such  value  as  in  the  case  of  other  personal 
property.  No  deduction  is  allowed  for  debts. 

The  tax  is  levied  and  collected  in  the  same  manner  as  other  personal 
property  taxes,  and  is  apportioned,  one-sixth  to  the  state  revenue  fund, 
one-sixth  to  the  county  revenue  fund,  one-third  to  the  city,  village  or 
town,  and  one-third  to  the  school  district  in  which  the  property  is 
assessed. 

[From  Report  of  Minnesota  Tax  Commission,  1912.] 

Mortgage  Taxation. — Prior  to  1907  mortgages  were  assessed  and  taxed 
in  the  same  manner  as  other  classes  of  personal  property.  *  *  *  The 

tax  could  rarely  be  enforced  against  non-residents  of  the  state,  and  as  a 
result  a  non-resident  could  loan  money  at  a  slightly  lower  rate  of  in¬ 
terest  and  still  derive  a  greater  net  revenue  from  his  loan  than  a  citizen 
of  the  state.  To  overcome  this  disadvantage  the  practice  became,  common 
of  having  the  mortgage  recorded  in  the  name  of  a  non-rfesident,  even 
when  actually  owned  by  a  citizen,  thus  evading  the  tax.  As  a  result  of 
this  practice  a  vefy  small  amount  of  public  revenue  was  derived  from 
|  this  source  of  taxation.  In  1907  the  legislature  passed  a  law  imposing 
a  tax  of  fifty  cents,  in  lieu  of  all  other  taxes,  on  each  hundred  dollars  of 
the  principal  debt  or  obligation  secured  by  the  mortgage.  This  law  applies 
to  all  mortgages,  whether  owned  by  residents  or  non-residents  of  the 
state,  except  mortgages  taken  by  persons  or  corporations  whose  personal 
.  property  is  expressly  exempted  by  law.  The  revenue  derived  under  the 
law  for  the  year  ending  September  30,  1909,  amounted  to  $385,910.91,  and 
for  the  year  ending  September  30,  1910,  $509,542.26,  the  total  collected 
since  the  enactment  of  the  law  to  the  last-named  date  being  $1,320,972.69. 


[From  Report  of  the  Minnesota  Tax  Commission,  1914.] 


A  tax  is  (1914)  imposed  on  all  mortgages  upon  real  property  situate 
in  this  state.  The  tax  is  a  registration  tax  imposed  at  the  time  the  mort¬ 
gage  is  filed  for  record.  If  the  mortgage  is  due  not  more  than  five  years 
after  its  date  the  tax  is  fifteen  cents  upon  each  hundred  dollars,  or  frac- 


32 


7 


tlon  thereof.  If  the  mortgage  matures  more  than  five  years  after  its 
date  the  tax  is  twenty-five  cents  upon  each  hundred  dollars  or  fraction 
thereof.  The  payment  of  the  registry  tax  exempts  the  obligation  secured 
from  all  other  taxes.  If  the  mortgage  is  not  recorded  the  obligation 
secured  thereby  is  taxable  the  same  as  any  other  credit.  Mortgage  regis¬ 
try  taxes  are  apportioned,  one-sixth  to  the  revenue  fund  of  the  state, 
one-sixth  to  the  county  revenue  fund,  and  the  balance  is  divided  equally 
between  the  school  district  and  the  city,  village  or  town  in  which  the 
real  estate  covered  by  the  mortgage  is  situated. 

NEW  MEXICO 

Santa  Fe,  Oct.  4,  1915. — Dear  Sir:  I  have  to  inform  you  in  reply  to 
yours  of  September  30  that  our  State  Constitution  at  first  provided  for 
the  general  property  tax  system.  At  our  state  election  last  year  an 
amendment  was  adopted  to  this  Constitution  giving  the  legislature  prac¬ 
tically  a  free  hand  in  the-  way  of  legislation  relating  to  taxation.  Per¬ 
sonally,  I  see  no  objection  to  permission  being  granted  under  the  Con¬ 
stitution  to  the  legislature  embodying  the  principle  of  classification.  I  am 
rather  inclined  to  the  belief  that  the  system  of  property  tax  can  be  made 
effective  and  is  as  reasonable  and  fair  as  anything  that  I  have  ever 
heard  suggested.  The  modern  ideas  of  taxation  depend  for  their  suc¬ 
cess  upon  the  aroused  sentiment  of  the  people,  and  because  of  this  their 
success  is  attributed  to  the  improved  methods  of  taxation  as  claimed  by 
those  who  advocate  what  is  known  as  modern  ideas.  If  the  people  gen¬ 
erally  become  interested  and  insist  upon  a  proper  assessment  under  the 
-property  tax  system,  good  results  in  my  opinion  may  be  obtained.  W.  C. 
M’DONALD,  Governor. 

Constitutional  Provisions:  Article  VIII  [as  amended  November  3,  1914], 
Sec.  1.  Taxes  levied  upon  tangible  property  shall  be  in  proportion  to  the  value 
thereof,  and  taxes  shall  be  equal  and  uniform  upon  subjects  of  taxation  of  the 
same  class. 

Sec.  2.  Taxes  levied  upon  real  or  personal  property  for  state  revenue  shall 
not  exceed  four  mills  annually  on  each  dollar  of  the  assessed  valuation  thereof, 
except  for  “the  support  of  the  educational,  penal,  and  charitable  institutions  of 
the  state,  payment  of  the  state  debt  and  interest  thereon;  and  the  total  annual 
tax  levy  upon  such  property  for  all  state  purposes,  exclusive  of  necessary  levies 
for  the  state  debt,  shall  not  exceed  ten  mills. 

Sec.  3.  The  property  of  the  United  States,  the  state  and  all  counties,  towns, 
cities,  and  school  districts,  and  other  municipal  corporations,  public  libraries, 
community  ^ditches  and  all  laterals  thereof,  all  church  property,  all  property 
used  for  educational  or  charitable  purposes,  all  cemeteries  not  used  or  held  for 
private  or  corporate  profit,  and  all  bonds  of  the  State  of  New  Mexico,  and  of 
the  counties,  municipalities,  and  districts  thereof,  shall  be  exempt  from 
taxation. 

Sec.  5.  The  legislature  may  exempt  from  taxation  property  of  each  head  of 
a  family  to  the  amount  of  two  hundred  dollars. 

Sec.  6.  Lands  held  in  large  tracts  shall  not  be  assessed  for  taxation  at  any 
lower  value  per  acre  than  lands  of  the  same  character  or  quality  and  similarly 
situated,  held  in  smaller  tracts.  The  plowing  of  land  shall  not  be  considered 
as  adding  value  thereto  for  the  purpose  of  taxation. 

Note:  See  “Note’'  under  Arizona. 


NEW  YORK 

Albany,  Oct.  3,  1915. — Dear  Sir:  The  State  Tax  Commission  acknowl¬ 
edges  the  receipt  of  your  letter  of  September  30,  addressed  to  Honorable 
Charles  S.  Whitman,  Governor.  The  present  Constitution  contains  no 
requirement  for  a  general  property  tax  system,  nor  does  it  permit  the 
classification  of  different  kinds  of  property.  The  power  is  entirely  with 
the  legislature.  During  the  summer  the  Constitutional  Convention  met 
In  Albany  and  adopted  a  proposed  new  Article  on  Taxation,  which  is  to 
be  submitted  to  the  voters  at  this  next  election.  STATE  TAX  COMiMIS- 
SION,  C.  J.  Tobin,  Counsel. 

Note. — The  new  article  referred  to  by  Mr.  Tobin  was  defeated  at  the 
election  of  Nov.  2,  1915,  and  the  powers  of  the  legislature  in  matters  of 

33 


TO  YOUR  NEIGHBORS  AND  FRIENDS  ABOUT  THIS. 


taxation  remain  as  before,  practically  unrestricted.  The  .New  York  Con¬ 
stitutional  Provision  follows: 

Constitutional  Provisions:  Article  III,  Legislative  Powers,  Sec.  48.  Every 
law  which  imposes,  continues,  or  revives  a  tax  shall  distinctly  state  the  tax 
and  the  object  to  which  it  is  to  be  applied,  and  it  shall  not  be  sufficient  to 
refer  to  any  other  lawr  to  fix  such  tax  or  object. 

Sec.  49.  On  the  final  passage,  in  either  house  of  the  legislature,  of  any  act 
which  imposes,  continues,  or  revives  a  tax,  or  creates  a  debt  or  charge,  or 
makes,  continues,  or  revives  any  appropriation  of  public  or  trust  money  or 
property,  or  releases,  discharges,  or  commutes  any  claim  or  demand  of  the 
state,  the  question  shall  be  by  yeas  and  nays,  which  shall  be  duly  entered  upon 
the  journals,  and  three-fifths  of  all  the  members  elected  to  either  house  shall 
in  all  such  cases  be  necessary  to  constitute  a  quorum  therein. 

Operation  of  the  New  York  System 

In  1913  a  sub-committee  of  the  Board  of  Taxes  and  Assessments  of 
New  York  City  published  a  Report  on  the  Taxation  of  Personal 
Property  from  1880  to  1913. 

Since  1880  the  policy  of  the  State  of  New  York  towards  the  taxation 
of  personal  property  has  been  to  classify  such  property  and  to  impose  a 
special  tax  upon  each  separate  class.  As  each  class  has  been  defined  in 
the  tax  law  and  subjected  to  its  special  tax,  it  has  been  withdrawn  from 
liability  to  the  general  property  tax. 

The  object  of  the  report  was — 

1.  To  point  out  the  large  revenue  derived  in  the  State  of  New  York 
from  these  special  taxes  on  classified  property. 

2.  To  show  that  a  larger  revenue  is  derived  from  these  special  taxes 
than  could  be  had  by  attempting  to  reach  such  classified  property  by  the 
personal  property  tax,  either  at  the  current  local  rates  or  at  a  low  rate, 
such  as  three  mills. 

3.  To  show  that  under  the  classified  tax  policy  of  New  York  State 

the  proportion  of  taxes  paid  by  real  estate  has  been  greatly  decreased  and 
the  proportion  derived  from  the  other  sources  greatly  increased.  *  *  * 

A  total  of  $45,600,000  is  produced  annually  by  taxes  that  have  been 
substituted  for  the  personal  property  assessment. 

Is  it  conceivable  that  any  sum  approaching  $45,600,000  could  be  ob¬ 
tained  from  the  ordinary  personal  property  assessment  if  these  special 
taxes  were  repealed,  and  all  personal  property  were  again  made  subject 
to  the  general  property  tax? 

At  a  2  per  cent  rate  it  would  require  $2,280,016,400  to  produce  such  a 
revenue.  And  the  largest  personal  assessment  ever  known  in  the  state 
was  only  $800,000,000. 

At  a  3-mill  rate  it  would  require  $15,200,108,000  (over  fifteen  billion 
dollars)  to  produce  such  a  revenue. 

Yet  these  special  taxes  produce  $37,327,026  without  any  difficulty  in 
administration,  and  without  the  perjury,  friction  and  ill-feeling  which 
^  must  attend  any  attempt  at  a  listing  system,  whether  the  tax  be  bur- 
I-  densome  or  light. 

Proportion  of  Personal  Taxes  to  Real  Estate  Taxes 


If  we  assume  a  tax  rate  of  2  per  cent  it  will  require . $  1,866,351,312 

to  produce  the  $37,327,026  now  produced  by  the  Special  In¬ 
direct  Taxes.  Add  to  that  the  present  assessed  value  of 
personal  property  subject  to  the  personal  property  tax..  462,300,841 


Total  . $  2,528,652,153 

-Total  assessed  value  of  real  estate  is  . $10,561,501,373 


Hence  the  value  of  personal  property  on  the  equivalent  of  a  2  per  cent 
tax  rate  is  25  per  cent  of  the  value  of  real  estate,  or  20  per  cent  of  the 
total  of  real  and  personal. 


34 


This  may  seem  small,  yet  in  1880,  before  New  York  began  its  system  " 
of  classified  personal  property  taxes  the  proportion  of  personal  to  the 
total  of  real  and  personal  was  only  12.70  per  cent.  So  that  the  result 
of  the  inauguration  of  the  present  New  York  tax  system  has  been  nearly 
to  double  the  proportion  of  personal  to  the  total  of  real  and  personal. 

12.70  per  cent  of  the  present  total  of  real  and  personal  would  be  f 
$1,400,022,880.  Yet  the  indirect  taxes  on  personal  property  produced 
the  equivalent  of  a  2  per  cent  tax  on  $1,866,351,312,  and  we  still  have 
$462,300,841  of  personal  property  on  our  rolls.  Hence  any  attempt  to  sug¬ 
gest  that  the  imposing  of  special  taxes  has  resulted  in  the  exemption  of 
personal  property  is  simply  ridiculous. 

In  concluding  a  more  detailed  discussion  of  the  division  of  tax 
burden  as  between  real  estate  and  personal  property,  the  report  says : 

Thus  in  1913,  as  a  result  of  the  establishment  of  the  classified  tax  sys-  | 
tem  of  the  state,  the  burden  of  real  estate  has  fallen  from  87  per  cent  to  >- 
65  per  cent.  J 

The  report  goes  on  to  say  that  the  mortgage  recording  tax  paid  in 
'  the  previous  year  was  upon  a  total  of  $740,929,780.  The  recording 
fee  in  New.  York  being  fifty  cents  on  the  $100  for  the  period  of  the 
mortgage,  the  revenues  from  this  source  alone  for  all  purposes  through¬ 
out  the  state  amounted  to  $3,704,648.  In  the  last  year  in  which  at¬ 
tempt  was  made  to  assess  mortgages  under  the  old  general  property 
tax — 1906 — at  the  current  rate  of  approximately  $3.00  on  the  $100, 
only  $935,291  was  derived  from  the  same  source  in  New  York  State. 

The  report  also  discusses  what  would  happen  if  the  classified  taxes 
were  abolished  and  an  attempt  made  to  raise  the  present  revenues 
under  the  general  property  tax,  as  follows : 

Who  Would  Pay? 

First  of  all  the  farmers,  for  they  have  $189,662,043  of  live  stock  and 
$58,806,300  of  farm  implements  and  machinery.  This  would  all  be  open 
to  the  view  of  the  assessor  and  could  not  escape.  And  it  would  be  all 
new  found  revenue,  because  practically  none  of  the  special  taxes  fall 
on  the  farmers  now. 

Second,  the  manufacturers,  who  have  $486,774,713  of  manufacturing 
machinery,  tools  and  implements.  These  also  would  be  open  to  the  view 
of  the  assessor.  But  note  that  to-day  our  taxes  on  corporations  produce 
$10,349,164.76  and  on  organization  of  corporations  $472,959.81,  a  total  of 
$10,822,124.57,  or  the  equivalent  of  a  3-mill  tax  on  $3,607,374,788. 

Third,  the  merchants,  whose  stocks  of  goods  would  be  open  to  the  view  U 
of  the  assessor. 

Fourth,  the  householder,  whose  furniture,  clothing,  books,  silverware, 
pictures,  jewelry,  horses,  carriages,  automobiles,  etc.,  would  all  be  sub¬ 
ject  to  appraisal  and  assessment  by  the  assessor. 

Fifth,  the  investors  in  bonds,  mortgages  and  notes,  who  would  be  as 
diligent  as  possible  in  concealing  sjuch  possessions  from  the  assessor. 

Note  that  under  the  mortgage  recording  tax  and  the  secured  debt  law 
the  investors  in  such  securities  now  have  to  pay  a  tax  on  such  securi¬ 
ties.  * 

The  result,  then,  would  be  that  farmers,  manufacturers,  merchants  and 
householders  would  all  pay  more  under  such  a  system  and  that  the  own¬ 
ers  of  bonds,  mortgages  and  notes  would  be  left  as  they  are  now,  unless 
they  voluntarily  listed  their  securities  with  the  assessor. 

And  the  further  result  would  be  that  if  every  farmer,  manufacturer, 
merchant  and  householder  paid  on  all  his  tangible  property  and  investors 
listed  all  their  bonds,  mortgages  and  notes,  a  tax  of  3  mills  on  all  this  > 


35 


WRITE  FOR  ADDITIONAL  COPIES. 


would  produce  $32,773,061.91  instead  of  $45,600,324  under  the  present 
system. 

The  mortgage  recording  tax  and  the  secured  debts  tax  are  the  New 
York  methods  for  taxation  of  intangibles  to  the  individual,  most  often 
referred  to.  Bank  taxation  in  New  York  is  summarized  as  follows 
by  Thomas  B.  Paton,  General  Counsel  American  Bankers’  Associa¬ 
tion,  in  a  paper  read  before  the  1913  conference  of  the  National  Tax 
Association,  page  317,  1913  proceedings: 

*  *  *  In  lieu  of  all  other  taxation,  there  is  a  flat  rate  of  one  per  cent 

upon  the  value  of  the  shares,  including  the  real  estate  in  such  value,  and 
in  addition  the  hank  must  pay  taxes  locally  upon  any  real  estate  which 
it  may  own.  Banks,  so  far  as  I  can  learn,  are  satisfied  .with  the  Justice 
of  this  system. 

NORTH  DAKOTA 

Bismarck,  Oct.  4,  1915. — Dear  Sir:  Answering  your  questions:  The 
state  imposes  a  general  property  system  tax.  Our  Constitution  also  per¬ 
mits  of  the  classification  of  the  different  kinds  of  property  and  our  legis¬ 
lature  has  broad  powers  in  enacting  legislation  for  taxation.  Our  Con¬ 
stitution  has  not  been  changed  materially  for  a  number  of  years,  except 
that  a  year  ago  it  did  permit  the  classification  of  property  which  would 
permit  of  a  different  rate  of  taxation  to  go  against  one  class  of  property 
than  against  another.  Would  say  that  this  classification  amendment  was 
voted  on  by  the  people  in  1914.  Would  say  that  it  was  adopted.  Per¬ 
sonally,  I  believe  that  the  idea  of  a  property  classification  is  all  right, 
especially  in  view  of  the  effort  made  to*  tax  moneys  and  credits,  which 
Is  a  hard  thing  to  get  at  unless  there  is  some  reasonable  method  and 
some  fair  rate  adopted.  L.  B.  HANNA,  Governor. 

Constitutional  Provisions:  Secs.  176  and  179  as  amended  November  3,  1914: 

Sec.  176.  Taxes  shall  be  uniform  upon  the  same  class  of  property,  including 
franchises  within  the  territorial  limits  of  the  authority  levying  the  tax,  and 
shall  be  levied  and  collected  for  public  purposes  only,  but  the  property  of  the 
United  States,  and  of  the  state,  county,  and  municipal  corporations,  shall  be 
exempt  from  taxation;  and  the  Legislative  Assembly  shall  by  a  general  law 
exempt  from  taxation  property  used  exclusively  for  school,  religious,  cemetery, 
charitable,  or  other  public  purposes,  and  personal  property  to  any  amount  not 
exceeding  in  value  two  hundred  dollars  for  each  individual  liable  to  taxation: 
Provided,  That  all  taxes  and  exemptions  in  force  when  this  Amendment  Is 
adopted  shall  remain  in  force,  in  the  same  manner  and  to  the  same  extent,  un¬ 
til  otherwise  provided  by  statute.  # 

Sec.  179.  All  taxable  property,  except  as  hereinafter  in  this  section  provided, 
shall  be  assessed  in  the  county,  city,  township,  vilfage,  or  district  in  which  it 
is  situated,  in  the  manner  prescribed  by  law.  The  property,  including  fran¬ 
chises  of  all  railroads  operated  in  this  state,  and  of  all  express  companies, 
freight  line  companies,  dining-car  companies,  sleeping-car  companies,  car 
equipment  companies,  or  private  car  line  companies,  telegraph  or  telephone 
companies  or  corporations  operating  in  this  state  and  used  directly  or  indi¬ 
rectly  in  the  carrying  of  persons,  property,  or  messages,  shall  b$  assessed  by 
the  State  Board  of  Equalization  in  a  manner  prescribed  by  such  State  Board 
or  Commission  as  may  be  provided  by  law.  But  should  any  railroad  allow  any 
portion  of  its  railway  to  be  used  for  any  purpose  other  than  the  operation  of  a 
railroad  thereon  such  portion  of  its  roadway,  while  so  used,  shall  be  assessed 
In  the  manner  provided  for  the  assessment  of  other  real  property. 

OKLAHOMA 

Oklahoma  City,  Oct.  .30,  1915. — Dear  Sir:  I  have  yours  of  October 
25,  and  in  reply  to  same  beg  to  say  that  regarding  Art -10,  Sec.  5  of 
our  Constitution,  which  provides  “Taxes  shall  be  uniform  upon  the  same 
class  of  subjects,"  is  construed  as  authority  to  the  state  legislature  to 
classify  property  for  taxation  purposes,  and  in  regard  to  same  beg  to 
say  that  this  provision  in  our  Constitution,  whereby  our  legislature  is 
empowered  to  classify  property,  is  one  of  the  best  provisions  of  that 
Constitution.  •  *  ♦  There  is  no  question  in  my  mind  but  what,  with 

the  growing  functions  of  government  and  the  Increase  in  cost,  that  it  is 

36 


now  necessary  that  all  constitutions  be  written  so  that  legislative 
bodies  may  classify  property  for  taxation  purposes.  E.  B.  HOWARD, 
State  Auditor. 

Constitutional  Provision:  Article  X,  Sec.  5.  The  power  of  taxation  shall 
never  be  surrendered,  suspended,  or  contracted  away.  Taxes  shall  be  uniform 
upon  the  same  class  ( of  subjects. 

\  PENNSYLVANIA 

Harrisburg,  Oct.  11,  1915. — Dear  Sir:  Your  letter  of  the  30th  ult.  has 
been  referred  to  this  bureau  by  Hon.  M.  G.  Brumbaugh,  governor  of  this 
state,  to-day.  The  Constitution  of  Pennsylvania  provides  as  follows: 
“All  taxes  shall  be  uniform,  upon  the  same  class  of  subjects,  within  the 
territorial  limits  of  the  authority  levying  the  tax,  and  shall  be  levied 
and  collected  under  general  laws,  but  the  General  Assembly  may,  by  gen¬ 
eral  laws,  exempt  from  taxation  public  property  used  for  public  purposes, 
actual  places  of  religious  worship,  places  of  burial  not  used  or  held 
for  private  or  corporate  profit,  and  institutions  of  purely  public  charity.” 
Art.  IX,  Sec.  1.  Under  this  provision  classification  has  been  upheld  by 
our  courts  so  long  as  the  tax  is  uniform  upon  all  subjects  in  the  same 
class  within  the  taxing  district.  Our  state  taxes  are  largely  collected 
from  corporations  and  these  are  classified  for  the  purpose  of  taxation,  the 
rate  being  uniform  upon  the  same  class  of  corporations  only.  This  pro¬ 
vision  has  been  incorporated  in  the  Constitution  since  Jan.  1,  1874.  We 
cannot  say  that  there  is  a  pronounced  movement  for  an  amendment  of 
this  section  of 'the  Constitution,  nor  has  one  been  proposed  since  the 
adoption  in  1874.  Taxation  is  one  of  the  questions  that  is  not  a  vital  issue 
to  the  people  of  Pennsylvania,  taken  as  a  system.  The  only  issues  upon 
this  subject  are  such  as  arise  locally  and  then  concern  the  rate  or  levy 
only.  Having  no  tax  on  real  estate  for  state  purposes  nor  on  individual 
personal  property,  the  people  are  not  given  to  much  discussion  upon 
this  subject.  JAMES  N.  MOORE,  Director,  Legislative  Reference  Bureau. 

Constitutional  Provision:  Article  IX,  Sec.  1.  All  taxes  shall  be  uniform 
upon  the  same  class  of  subjects  within  the  territorial  limits  of  the  authority 
levying  the  tax,  and  shall  be  levied  and  collected  under  general  laws;  but  the 
Legislative  Assembly  may,  by  general  laws,  exempt  from  taxation  public  prop¬ 
erty  used  for  public  purposes,  actual  places  of  religious  worship,  places  of 
burial,  not  used  or  held  for  private  or  corporate  profit,  and  institutions  of  purely 
public  charity. 

Discussing  the  taxation  systems  of  other  states,  the  report  of  the 
Kentucky  Special  Tax  Commission,  pp.  89-92,  gives  a  survey  of  the 
methods  and  results  of  specific  taxation  in  the  State  of  Pennsylvania. 

For  thirty  years  Pennsylvania  has  taxed  intangible  property  at  a  uni¬ 
form  rate  of  four  mills  upon  each  dollar  of  the  fair  cash  valuation  ($4 
per  $1,000).  *  *  *  The  tax  has  two  parts:  First,  a  tax  upon  in¬ 
tangible  property  other  than  corporate  loans ;  and,  second,  a  tax  upon  the 
loans  of  counties,  municipalities  and  business  corporations  doing  business 
in  Pennsylvania.  In  reality,  however,  the  two  laws  form  a  single  con¬ 
sistent  scheme  for  the  taxation  of  intangible  property  at  a  uniform  rate. 
*  *  *  It  applies  to  money  at  interest,  money  owing  by  solvent  debtors, 

mortgages,  public  securities  not  exempt  from  taxation  nor  included  in  the 
>  tax  on  corporate  ldans,  and  shares  of  stock  in  all  corporations  other 

than  companies  subject  to  taxation  upon  their  capital  stock  of  their 

business  in  Pennsylvania.  It  is  collected  by  the  counties  and  paid 
into  the  state  treasury,  but  the  state  then  returns  three-fourths  of  the 

»  proceeds  to  the  various  counties.  The  tax  upon  corporate  loans  is  de¬ 

ducted  by  the  Treasurers  of  counties,  municipalities  and  business  cor¬ 
porations  when  paying  interest  upon  loans,  and  is  paid  directly  into  the 
state  treasury,  the  proceeds  accruing  wholly  to  the  state. 

A  very  large  part  of  the  tax,  possibly  fifty  per  cent,  is  collected  from 
mortgages  on  real  estate,  since  the  law  makes  rigorous  provisions  for 


37 


F  YOU  THINK  PRESENT  TAX  LAWS  ARE  BAD,  VOTE  FOR  THE  AMENDMENT. 


ascertaining  the  ownership  of  this  class  of  property;  a  .considerable 
amount  is  paid  by  trust  companies  upon  personal  property  which  they 
hold  in  trust,  and  the  remainder,  possibly  thirty  or  thirty-five  per  cent, 
is  paid  by  individuals  assessed  by  sworn  return  or  by  arbitrary  estimate. 
Even  allowing  for  the  large  amount  collected  from  mortgages,  the  in¬ 
crease  of  property  taxed  by  the  county  officials  at  the  rate  of  four  mills 
has  been  very  remarkable,  as  shown  by  the  following  table: 

Table  Showing  the  Amount  of  Intangible  Property  Locally  Assessed  In  Penn¬ 
sylvania. 


1885 . $  145,300,000  1900 

1888 .  429,800,000  1903 

1891 .  575,300,000  1906 

1894 .  613,900,000  1907 

1897 .  673,700,000 


$  722,900,000 
847,100,000 
932,900,00.0 
1,014,000,000 


Even  if  one-half  of  the  assessment  represents  mortgages  on  real 
estate,  the  results  are  striking.  In  other  states  we  have  shown  that 
personal  property  of  an  intangible  character  forms  a  decreasing  pro¬ 
portion  of  the  total  assessment  and  sometimes  fails  to  increase  at 
all  with  the  growth  of  wealth  and  population.  But  in  Pennsylvania 
during  the  last  twenty-five  years  intangible  property  taxed  at  the  rate 
of  four  mills  has  increased  much  more  rapidly  than  the  valuation  of 
real  estate,  which  between  1885  and  1903  increased  from  $1,697,202,000 
to  $2,986,197,000.  The  most  remarkable  increase  in  the  assessment  of 
intangible  property  occurred  between  1885  and  1888,  and  resulted  from  a 
stricter  assessment  law.  But  even  after  1888  the  law  remaining  un¬ 
changed,  the  assessments  showed  a  normal  and  healthy  increase,  as  the 
assessment  of  property  should  in  a  community  that  is  increasing  in 
wealth  and  population. 

In  point  of  fact,  the  administration  of  the  Pennsylvania  law  is  far 
from  rigorous;  and,  except  in  the  case  of  mortgages  and  personal  prop¬ 
erty  held  in  trust  by  trust  companies,  there  is  more  or  less  evasion. 
But,  even  so,  a  far  greater  proportion  of  such  property  is  reached  than 
in  other  states,  and  the  persons  who  are  taxed  pay  a  reasonable  rate, 
which  does  not  produce  material  hardship.  The  tax  is  not  looked  upon 
as  odious  or  confiscatory,  and  yields  a  substantial  revenue,  which  steadily 
increases  from  year  to  year. 

The  tax  upon  corporate  loans  is  collected  by  methods  which  make 
evasion  comparatively  difficult.  Although  limited  in  its  operation  to 
bonds  owned  by  residents  of  Pennsylvania,  the  yield  has  steadily  in¬ 
creased  at  a  satisfactory  rate.  From  1886  to  1890  the  receipts  averaged 
$300,000  per  year,  this  amount  being  somewhat  less  than  usual,  because 
considerable  sums  were  withheld  by  corporations  pending  the  out¬ 
come  of  litigation.  From  1891  to  1895  the  receipts  averaged  $1,130,000; 
from  1896  to  1900  they  averaged  $1,260,000;  from  1901  to  1905  they 
averaged  $1,530,000,  and  in  1906  amounted  to  $2,352,000.  Here,  as  in  the 
figures  showing  the  results  of  the  tax  upon  tangible  property  assessed 
locally,  we  find  a  healthy  and  normal  increase.  It  is  clear  that  the 
tax  on  corporate  loans,  even  though  it  is  collected  only  on  securities 
held  in  Pennsylvania,  does  not  drive  this  class  of  property  out  of  the 
state.  The  legal  questions  which  originally  arose  under  the  requirement 
that  the  corporations  deduct  the  tax  have  now  been  settled,  and  it  may 
be  regarded  as  established  that  a  state  has  the  right  to  require  domestic 
corporations  to  deduct  a  tax  in  this  manner  from  the  interest  on  securi¬ 
ties  owned  by  residents.  In  recent  years  corporations  have  often  volun¬ 
tarily  assumed  the  payment  of  the  tax  in  order  to  be  able  to  advertise 
that  their  bonds  are  non-taxable  in  Pennsylvania. 
r  From  the  figures  just  given,  showing  the  yield  in  1906,  it  can  be  com¬ 
puted  that  the  tax  on  corporate  loans  reached  approximately  $600,000,000 
J  of  property.  If  we  add  to  this  figure  the  $1,014,000,000  of  intangible 
property  assessed  by  the  county  officials,  we  have  a  total  of  $1,614,000,000 
of  intangible  property  taxed  in  Pennsylvania.  This  figure  excludes  the 


S8 


shares  of  corporations  taxed  directly  by  the  state.  It  amounts  to  nearly  ^ 
one-half  of  the  assessed  value  of  real  estate  subject  td  taxation  in  Penn¬ 
sylvania,  and  is  $391,600,000  greater  than  the  entire  assessed  value  of 
all  classes  of  real  and  personal  property  in  Minnesota  in  1910.  If  we 
deduct  the  amount  representing  the  probable  assessment  of  mortgages, 
we  still  have  more  than  $1,000,000,000  of  intangible  property  assessed 
for  taxation.  No  other  state  in  the  Union  has  ever  made  an  equally  r 
favorable  showing.  Ohio,  with  a  far  more  drastic  law,  assessed  in  1906 
only  $147,900,000,  and  this  includes  mortgages,  so  that  the  figures  are 
to  be  compared  with  the  total  of  $1,614,000,000  in  Pennsylvania.  Since 
1906  the  assessment  in  Pennsylvania  has  steadily  increased,  while  in 
Ohio  it  has  decreased  more  than  seven  per  cent. 

RHODE  ISLAND 

Providence,  Oct.  8,  1915. — Dear  Sir:  Your  letter  of  September  30, 
addressed  to  Hon.  R.  L.  Beeckman,  governor,  has  been  referred  to  this 
department  with  request  that  reply  be  made  to  you  direct.  Answer¬ 
ing  your  inquiry,  the  Constitution  of  Rhode  Island,  adopted  in  1842, 
gives  the  legislature  all  the  latitude  necessary  in  the  matter  of  the 
classification  of  property  for  purposes  of  taxation.  It  says  (Sec.  2) 
“the  burdens  of  this  state  ought  to  be  fairly  distributed  among  its 
citizens;”  and  (Sec.  15)  “the  General  Assembly  shall  from  time  to  time 
provide  for  making  new  valuations  of  property  for  the  assessment  of 
taxes  in  such  manner  as  they  may  deem  best.”  No  proposition  to  amend 
the  Constitution  in  this  particular  has  been  advanced  since  its  adoption 
in  1842.  When  the  general  property  tax  system  was  abolished  with  the 
enactment  of  the  Tax  Act  of  1912,  which,  among  other  radical  changes, 
effected  a  classification .  for  the  first  time  in  the  history  of  the  state, 
no  question  of  constitutional  authority  for  this  change  arose.  As  you 
will  see  by  reference  to  the  Tax  Act  of  1912,  which  I  am  sending  you 
under  separate  cover,  intangible  personal  property  is  taxed  throughout 
the  state  at  the  uniform  rate  of  forty  cents  for  each  $100  of  assessed 
valuation,  while  the  rates  on  real  estate  and  tangible  personal  property 
are  fixed  by  the  municipalities  within  certain  limitations  and  vary  from 
seventy  cents  to  $1.75  per  $100.  The  enactment  of  the  present  law  fol¬ 
lowed  three  years  of  careful  investigation  of  the  general  subject  of 
taxation  by  a  joint  special  committee  of  the  General  Assembly.  It  fol-  > 
lows,  therefore,  that  there  is  a  very  decided  opinion  in  this  state  that 
classification  of  property  for  purposes  of  taxation  is  not  only  desirable,  \ 
but  absolutely  necessary  to  the  equitable  distribution  of  the  tax  burden  [ 
under  present-day  industrial  and  economic  conditions  in  this  country. 

Z.  W.  BLISS,  Chairman,  Department  of  State  Taxation. 

Constitutional  Provisions:  Article  I,  Sec.  2.  •  •  *  All  laws  should  be 

made  for  the  good  of  the  whole;  and  the  burdens  of  the  state  ought  to  be 
fairly  distributed  among  its  citizens. 

Article  IV,  Sec.  15.  The  General  Assembly  shall,  from  time  to  time,  provide  for 
making  new  valuations  of  property  for  the  assessment  of  taxes  in  such  manner 
as  they  deem  best. 

During  the  fifth  session  of  the  National  Tax  Association  Confer¬ 
ence,  San  Francisco,  August,  1915,  Mr.  Bliss,  whose  letter  precedes, 
made  substantially  the  following  statement: 

In  regard  to  the  low  rate  on  intangibles:  We  had  formerly,  of  course, 
the  old  general  property  tax,  no  centralization  whatever,  and  all  in¬ 
tangibles  practically  escaped.  The  highest  estimate  of  intangibles  as¬ 
sessed  given  by  any  assessor  in  the  state  was  thirty  per  cent  of  the  total 
personal  property  assessment.  That  would  be  equivalent  to  a  local  as-  > 
sessment  on  intangibles  of  about  thirty  millions  of  dollars.  My  private 
opinion  was  that  it  was  probably  not  more  than  fifteen  or  twenty  mil¬ 
lions.  Under  our  new  provisions,  saving  accounts,  locally  taxable  before, 
were  made  exempt.  That  took  away  from  the  local  assessors  about 


39 


"  $139,000,000  which  were  liable  to  taxation,  and  the  greater  part  of  the 
fifteen,  twenty  or  thirty  million,  whatever  there  had  been  assessed,  was 
made  up  of  the  assessment  on  savings  accounts.  They  would  get  at  this 
from  the  probate  records.  Of  course,  they  already  paid  a  ta.x  of  four 
mills  to  the  state.  The  corporate  excess  and  our  gross  earnings  tax,  also 
the  tax  on  banks  and  trust  companies,  relieved  from  local  assessments 
more  than  $360,000,000  worth  of  securities.  *  *  *  In  spite  of  the 

fact  that  all  these  securities  were  relieved  from  local  taxation,  our  state 
J  revenue  has  increased  about  $800,000,  or  a  little  more,  and  our  local  rev¬ 
enue  about  $450,000  or  more,  so  that  our  total  revenue  has  increased  one 
and  one-quarter  million  dollars  under  the  low  rate.  We  have  1.8  mills 
direct  state  tax.  The  average  rate  of  taxation  in  1912  under  the  general 
property  tax  was  14.76  mills.  SO  THAT  OUR  LOCAL  REVENUES 
HAVE  INCREASED  $450,000  BY  THE  REDUCTION  OF  MORE  THAN 
TEN  MILLS  IN  RATES  ON  INTANGIBLES;  OUR  STATE  REVENUE 
HAS  INCREASED  $850,000  WITH  A  REDUCTION  OF  THE  DIRECT 

STATE  TAX  OF  NINE-TENTHS  OF  A  MILL, 
v 

VERMONT 

Northfield,  Oct.  5,  1915. — Dear  Sir:  Your  letter  of  September  30,  ad¬ 
dressed  to  Governor  Gates,  has  been  handed  to  me  for  my  attention.. 
Under  separate  cover  I  am  sending  you  a  copy  of  the  Constitution  of  the 
State  of  Vermont,  calling  your  attention  to  the  Ninth  Article  thereof 
appearing  on  page  twelve,  from  a  perusal  of  which  an  answer  will  be 
obtained  to  the  several  questions  you  ask.  CHARLES  A.  PLUMLEY, 
Commissioner  of  Taxes. 

Constitutional  Provision:  Article  IX,  Chapter  1.  That  every  member  of  so¬ 
ciety  hath  a  right  to  be  protected  in  the  enjoyment  of  life,  liberty,  and  property, 
and,  therefore,  is  bound  to  contribute  his  proportion  toward  the  expense  of  that 
protection  and  yield  his  personal  service,  when  necessary,  or  an  equivalent 
thereto,  but  no  part  of  any  person's  property  can  be  Justly  taken  from  him  or 
applied  to  public  uses  without  his  own  consent  or  that  of  the  representative 
body  of  freemen,  nor  can  any  man  who  is  conscientiously  scrupulous  of  bear¬ 
ing  arms  be  justly  compelled  thereto,  if  he  will  pay  such  equivalent;  •  •  • 

and  previous  to  any  law  being  made  to  raise  a  tax,  the  purpose  for  which  it  is 
to  be  raised  ought  to  appear  evident  to  the  legislature  to  be  of  more  service 
to  the  community  than  the  money  would  be  if  not  collected. 

That  the  foregoing  Constitutional  provisions  have  been  construed 
as  allowing  the  state  legislature  considerable  latitude  may  be  deduced 
by  reading  the  detailed  summary  of  the  Vermont  tax  system  as  set 
forth  in  the  Federal  Census  Bureau  Bulletin  on  Taxation  and  Revenue 
Systems,  already  referred  to.  Thus  among  various  ways  of  taxing 
different  classes  of  property  are  included  the  following  substitutes  for 
the  general  tax  on  certain  intangible  values : 

Savings  banks  and  trust  companies  pay  7/10  of  1  per  cent  on  the  aver¬ 
age  amount  of  deposits  and  accumulations,  less  an  amount  not  exceeding 
10  per  cent  of  their  assets  when  invested  in  United  States  bonds.  In 
the  case  of  banks,  the  average  amount  of  the  assessed  valuation  of  real 
estate  owned  by  such  corporations  is  also  deducted.  These  taxes  are 
payable  in  semi-annual  installments. 

National  bank  deposits  bearing  more  than  2  per  cent  interest  are  taxed 
7/20  of  1  per  cent.  The  tax  is  paid  by  the  depositor  or  the  bank  may 
pay  the  tax  and  charge  it  to  the  depositor.  See  page  22. 

Building  and  investment  companies  and  agents  for  the  same  pay  1 
per  cent  upon  the  aggregate  amount  of  moneys  received  to  be  loaned  with¬ 
out  the  state  and  upon  the  aggregate  amount  of  bonds,  mortgages,  choses 
in  action  and  securities  negotiated,  unless  they  return  the  name  and  ad¬ 
dress  of  the  person  for  whom  the  investment  was  made,  in  which  case 
the  tax  is  assessed  to  him. 

Also,  a  considerable  list  of  minor  exemptions,  including — in  addition 
to  property  exempted  in  Illinois,  personal  property  held  by  residents  but 


40 


owned  and  taxed  in  other  states,  etc. — the  following:  Money  loaned  to 
towns,  etc.,  at  not  over  4  per  cent;  $500  in  household  furniture,  wearing 
apparel,  private  and  professional  libraries,  mechanics’  and  farmers'  tools, 
money  loaned  at  5  per  cent  or  less,  evidenced  by  note  or  mortgage;  one 
wagon,  harness,  etc.,  produce  and  provisions  to  a  limited  amount. 

VIRGINIA 

Richmond,  Oct.  15,  1915. — Dear  Sir:  The  Governor  directs  me  to  reply 
to  your  letter  of  October  9  and  to  advise  you  that  the  Constitution  of 
Virginia,  which  was  adopted  in  1902  by  vote  of  the  Convention  and  which 
was  not  submitted  to  the  people,  does  not  prevent  a  classification  of  differ¬ 
ent  kinds  of  property  for  purposes  of  taxation.  At  a  special  session  of 
the  General  Assembly,  held  last  winter,  the  tax  laws  of  Virginia  were 
revised  and  property  was  reclassified.  I  trust  this  answers  your  questions. 
ALEXANDER  FORWARD,  Secretary  to  the  Governor. 

Constitutional  Provisions:  Article  XIII,  Sec.  168.  All  property,  except  as 
hereinafter  provided,  shall  be  taxed;  all  taxes,  whether  state,  local,  or  munici¬ 
pal,  shall  be  uniform  upon  the  same  class  of  subjects  within  the  territorial 
limits  of  the  authority  levying  the  tax,  and  shall  be  levied  and  collected  under 
general  laws. 

Sec.  169.  Except  as  hereinafter  provided,  all  assessments  of  real  estate  and 
tangible  personal  property  shall  be  at  their  fair  market  value,  to  be  ascertained 
as  prescribed  by  law.  The  General  Assembly  may  allow  a  lower  rate  of  taxa¬ 
tion  to  be  imposed  for  a  period  of  years  by  a  city  or  town  upon  land  added  to 
Its  corporate  limits  than  is  imposed  on  similar  property  within  its  limits  at  the 
time  such  land  is  added.  Nothing  in  this  Constitution  shall  prevent  the  Gen¬ 
eral  Assembly,  after  the  first  day  of  January,  1913,  from  segregating  for  the 
purposes  of  taxation  the  several  kinds  and  classes  of  property,  so  as  to  specify 
and  determine  upon  what  subjects  istate  taxes  and  upon  what  subjects  local 
taxes  may  be  levied. 

WISCONSIN 

Madison,  Oct.  16,  1915. — Dear  Sir:  Your  letter  to  Governor  Phillip  has 
been  received  and  was  delayed  a  few  days  owing  to  the  pressure  of  work 
in  the  Governor's  office.  In  answer  to  your  several  questions,  the  Wis¬ 
consin  Constitution  simply  provides  that:  “The  rules  of  taxation  shall 
be  uniform,  and  taxes  shall  be  levied  upon  such  property  as  the  legisla¬ 
ture  shall  prescribe.”  It  further  says  that,  “Taxes  may  also  be  imposed 
on  incomes,  privileges  and  occupations,  which  taxes  may  be  graduated 
and  progressive,  and  reasonable  exemptions  may  be  provided.”  This 
Sec.  1  of  Art.  VIII  is  an  amended  section  which  was  adopted  by  the  people 
in  November,  1908.  There  does  not  seem  to  be  any  general  demand 
among  the  people  for  changing  the  Constitution  in  such  regard. 
CHARLES  D.  STEWART,  Executive  Clerk. 

In  1911  Wisconsin  substituted  an  income  tax  for  the  former  general 
tax  upon  intangible  personal  property.  As  to  the  operation  of  the 
new  tax — which  is  conceded  to  have  some  imperfections — in  compari¬ 
son  with  the  old  methods,  the  Wisconsin  Tax  Commission  makes  the 
following  comment  in  its  1914  report: 

When  the  income  tax  was  introduced  there  was  exempted  from 
taxation  moneys  and  credits,  stocks  and  bonds  not  otherwise  specially 
provided  for,  personal  ornaments  and' jewelry  habitually  worn,  house¬ 
hold  furniture,  machinery,  implements  and  tools  used  in  farm,  orchard 
and  garden,  and  one  watch  carried  by  the  owner.  In  addition  the 
limitation  of  $200  on  musical  instruments  and  household  furniture,  the 
limitation  of  $50  on  tools  and  of  $50  on  each  watch  carried  by  the 
owner  were  removed.  These  groups  of  personal  taxation  were  relin¬ 
quished.  Two  questions  arise:  Was  the  exemption  wise?  Did  the 
income  tax  fill  the  gap  left  by  these  exemptions? 

Speaking  generally,  these  classes  of  property  were  so  unequally  and 
inequitably  assessed,  and  the  attempt  to  assess  them  caused  so  much 
trouble  and  expense  relative  to  their  yield,  that  the  exemptions  would 
have  been  warranted  even  though  no  substitute  at  all  had  been  pro¬ 
vided.  •  •  •  When  they  were  assessed,  excepting  stocks,  bond# 


41 


and  securities,  they  usually  covered  a  larger  share  of  the  taxable 
wealth  of  the  poor  than  the  rich.  *  *  *  The  assessment  of  house¬ 

hold  property  tended  toward  a  uniform  level  for  rich  or  poor,  and  the 
jewelry  of  the  rich,  together  with  intangible  property  in  general,  was 
seldom  found. 

The  assessment  of  stocks,  bonds,  moneys  and  credits  was  particu¬ 
larly  inequitable.  A  careful  investigation  of  473  estates  some  years 
ago  showed  taxable  securities  worth  $2,266,105,  which  were  assessed 
at  only  $74,995,  or  less  than  3 y2  per  cent  of  their  true  value.  The 
tangible  personal  property  in  these  estates — household  furniture,  pianos, 
carriages  and  the  like — was  inventoried  at  $148,309  and  assessed  at 
$80,390,  or  54  per  cent  of  its  true  value.  The  securities,  therefore, 
were  worth  fifteen  times  as  much  as  the  tangible  personality  but 
were  actually  assessed  for  a  smaller  amount. 

And  the  assessment  of  securities  was  almost  unbelievably  irregular.  , 
This  is  illustrated  by  *  *  *  the  per  capita  assessment  of  moneys 
and  credits  in  1910.  *  *  *  In  Douglas  County  $100  worth  of  moneys 
and  credits  were  assessed — less  than  l  cent  per  capita;  in  Iron, 
Vilas,  Florence,  Oneida,  Sawyer  and  Taylor  counties  no  moneys  and 
credits  were  assessed  at  all.  In  Kenosha  County,  on  the  other  hand, 
the  assessment  amounted  to  $71.68  per  capita.  •  *  * 

In  Kenosha  city  the  per  capita  average  rose  to  $105.95,  while  In 
Pleasant  Prairie  town,  within  the  same  county.  It  was  only  6  cents 
per  capita;  in  Randall  town,  on  the  other  hand,  it  amounted  to 
$22.63  per  capita.  But  even  in  this  county  the  large  assessment  is 
explained  principally  by  the  assessment  of  a  few  large  estates  in 
the  probate  court — the  property  largely  of  widows  and  orphans,  which 
could  not  be  concealed.  And  when  this  class  of  property  was  found 
the  tax  burden  upon  it  was  unreasonably  severe.  *  *  *  The  aver¬ 

age  thousand-dollar  bond  yielded  perhaps  $50  interest  a  year.  Twenty 
dollars  of  this  would  therefore  be  taken  in  taxes  if  the  security  was 
discovered,  equivalent  to  an  income  tax  of  40  per  cent.  No  personal 
property  tax  imposing  a  burden  as  severe  as  this  can  be  successfully 
administered. 

The  preceding  facts  make  it  reasonably  plain  that  the  personal 
property  taxes  in  question  were  not  worth  keeping.  •  *  *  The 

income  tax,  however,  more  than  filled  the  gap  left  by  their  abolition. 
Up  to  June  30,  1913,  the  cash  collections  under  the  income  tax  assessed 
in  1914  amounted  to  $1,631,413.38.  On  the  other  hand,  careful  esti- 
-<  mates  of  what  the  personal  property  tax  exempted  would  have  yielded 
at  the  tax  rates  prevailing  in  1912  were  made,  and  the  amount  so  lost 
or  relinquished  was  found  to  be  $703,589.  In  short,  the  income  tax 
yielded  the  first  year  considerably  more  than  twice  as  much  in  cash 
as  the  exempted  personality  would  have  yielded  had  it  been  subject 
^  to  taxation.  _ 


VIEWS  IN  OTHER  STATES 

Expressions  of  opinion  from  States  in  which  there  exist  constitu¬ 
tional  restrictions  against  classification,  follow; 

CALIFORNIA 

Sacramento,  Oct.  29,  1915. — Dear  Sir:  Under  date  of  September  29,  you 
directed  a  communication  to  Governor  Johnson,  which  has  been  turned 
over  to  this  office  for  answer.  I  will  answer  the  questions  which  you  ask 
in  the  order  in  which  they  appear  in  your  communication.  First — Our 
Constitution  provides  for  a  separation  of  state  and  local  taxation,  the 
state  getting  its  revenue  from  a  tax  on  the  gross  receipts  of  public  serv¬ 
ice  corporations,  on  the  capital  stock  of  banks  and  on  the  premiums  of 
insurance  companies,  the  operative  property  of  these  corporations  being 
relieved  from  local  taxation.  All  other  property  is  assessed  under  the 


42 


general  property  tax  system  for  local  taxes.  An  emergency  provision 
allows  the  state  to  levy  a  general  property  tax  on  all  of  the  property  In 
the  state  when  a  deficiency  exists  in  the  revenues  derived  from  the  sep¬ 
arate  sources.  The  only  latitude  that  the  legislature  has,  so  far  as 
state  taxation  is  concerned,  is  to  change  by  a  two-thirds  vote  the  per¬ 
centage  rate  levied  against  the  several  classes  of  corporations,  hanks  and 
insurance  companies,  and  in  the  assessment  of  the  franchises  of  private 
corporations.  Second — The  existing  revenue  system  has  been  in  force 
since  1910.  Third — The  only  classification  of  property  is  carried  in  the 
Constitution,  the  legislature  having  no  po^er  in  that  regard.  There  has 
been  an  agitation  in  favor  of  giving  the  legislature  broader  power  in  the 
matter  of  classification  of  property  and  determination  of  methods  of 
taxation,  which  culminated  at  the  1915  session  of  the  legislature  in  a 
constitutional  amendment  giving  the  legislature  very  broad  powers  in 
revenue  and  taxation  matters.  This  amendment  was  passed  with  the 
idea  in  mind  that  a  broad  latitude  could  be  given  the  legislature  inas¬ 
much  as  the  power  of  referendum  rested  in  the  people,  and  on  the  ad¬ 
vice  of  the  Attorney-General  during  the  legislature  it  was  believed  that 
any  act  passed  by  the  legislature  under  the  proposed  constitutional  amend¬ 
ment,  outside  of  acts  actually  levying  a  tax  for  governmental  purposes, 
would  be  subject  to  the  referendum.  I  was  personally  much  interested 
in  the  amendment  at  the  time  of  its  passage  through  the  leg¬ 
islature,  and  our  commission,  which  was  created  by  the  same  legis¬ 
lature,  endorsed  the  amendment  and  worked  for  it  up  to  within  a  week 
of  the  special  election  at  which  such  amendment  was  submitted  on  Octo¬ 
ber  26.  Several  days  before  the  election  the  Attorney-General  publicly 
reversed  his  previous  ruling  on  the  amendment  as  to  the  power  to  in¬ 
voke  the  referendum,  his  last  opinion  holding  that  no  legislation  under 
the  amendment  would  be  subject  to  referendum.  This  commission,  be¬ 
cause  of  this  ruling,  withdrew  its  support  of  the  amendment,  which  was 
overwhelmingly  rejected  at  the  election  as  above  noted.  TJiero  were 
nine  other  constitutional  amendements  placed  before  the  people  at  this 
election  and  none  of  them  passed,  with  the  possible  exception  of  one, 
which  is  still  in  doubt.  It  is  probable  that  the  lax  amendment  would 
have  been  defeated  along  with  the  others  even  if  the  unfortunate  occur¬ 
rence  had  not  taken  place  regarding  the  Attorney-GeneraTs  action.  This 
commission  is  very  much  in  favor  of  more  liberal  provisions  in  the  State 
Constitution  regarding  the  power  of  the  legislature  to  classify  prop¬ 
erty,  looking  toward  a  more  equitable  distribution  of  the  tax  burden. 
We  are  convinced,  from  the  experience  of  this  state  and  what  we  gather 
has  been  the  experience  in  others,  that  inflexible  and  restrictive  provi¬ 
sions  in  the  Constitution  work  more  injustice  than  is  done  by  purely 
legislative  action,  even  though  that  action  be  at  times  dominated  by  spe¬ 
cial  interests.  As  a  matter  of  fact,  the  restrictive  provisions  in  our  own 
Constitution  were  placed  there  through  the  action  of  the  legislature  ad¬ 
mittedly  dominated  at  the  time  by  the  railroad  and  allied  corporation 
interests  of  the  state.  It  is  so  restricted  that  practically  no  adjustment 
of  inequalities  can  be  made  under  it.  We  will  look  with  interest  to  the 
results  in  your  state  when  you  vote  on  your  property  classification  amend¬ 
ment.  I  have  noticed  the  amendment  which  is  to  be  proposed  to  the 
people  of  Illinois,  and  while  it  is  not  as  liberal  a  provision  as  that  pro¬ 
posed  in  the  amendment  which  was  submitted  in  California,  it  is,  I  be¬ 
lieve,  a  good  step  in  the  right  direction,  and  I  sincerely  hope  that  yotr 
may  be  successful  in  adopting  it  as  a  part  of  your  fundamental  law. 
Very  truly  yours,  C.  S.  SEAVBY,  Chairman,  State  Tax  Commission. 

Mr.  Wm.  V.  Cowan,  Secretary  of  the  State  Tax  Commission,  in  a 
letter  before  the  vote  on  the  amendment  mentioned  in  the  foregoing 
letter,  wrote  substantially  as  follows : 

Our  constitutional  system  has  proven  so  unjust  and  inequitable  that 
we  have  a  proposed  amendment  to  the  Constitution,  giving  the  legisla- 


43 


VOTE:  “YES.”  —NO  VOTE  COUNTS  AS  A  VOTE  “NO.” 


ture  full  power  over  taxation  matters,  which  will  come  up  to  be  voted 
upon  at  a  special  election  the  twenty-sixth  of  this  month.  We  have  little 
hope  of  its  being  adopted,  however,  because  we  have  not  had  sufficient 
time  to  acquaint  the  people  of  the  state  of  its  value.  They  all  realize 
the  inequalities  and  injustice  of  the  present,  system,  but  they  have  been 
so  wedded  all  these  past  years  to  the  idea  that  the  Constitution  should 
contain  a  definite  system  of  taxation,  and  therefore  cannot  realize  the 
importance  of  giving  the  legislature  ample  power.  If  the  amendment  does 
not  carry  this  year,  we  shall  undoubtedly  submit  a  similar  amendment 
two  or  three  years  hence.  This  present  proposed  amendment  gives  the 
legislature  absolute  power  over  taxation.  *  *  *  This  commission  is 

very  much  opposed  to  placing  any  definite  tax  scheme  or  system  in  the 
Constitution.  It  is  a  cumbersome  way  of  handling  a  subject,  which,  of 
its  very  nature,  should  be  changed  and  corrected  from  time  to  time  in 
order  to  meet  the  changing  social,  industrial  and  economic  conditions. 

INDIANA 

Indianapolis,  Oct.  1,  1915. — Dear  Sir:  Your  letter  of  the  29th  ad¬ 
dressed  to  the  Governor  was  handed  to  us  for  consideration.  The  Con¬ 
stitution  of  the  State  of  Indiana  imposes  the  general  property  tax  sys¬ 
tem  and  does  not  permit  of  classification.  This  is  an  amendment  to  the 
Constitution  taking  effect  in  1851  and  there  has  been  no  other  change  in 
the  Constitution  relating  to  taxation  since  then.  There  is  a  movement 
to  broaden  the  powers  of  the  legislature  and  if  possible  to  change  the 
Constitutional  provision  in  order  to  permit  a  scientific  and  just  system 
of  taxation.  The  legislature  of  1911  passed  a  constitutional  amendment 
providing  for  a  classification  tax.  This  was  defeated  in  1913.  Under 
our  Constitution,  an  amendment  to  the  Constitution  must  be  passed  by 
the  legislature  twice  and  then  be  submitted  to  the  people  for  vote.  As 
above  stated,  the  legislature  defeated  this  proposition  at  the  last  session. 
There  was  presented  to  the  people  in  1913  the  question  of  calling  a 
Constitutional  Convention,  which,  while  it  carried  a  majority  vote,  was 
lost  because  it  did  not  carry  a  majority  of  all  the  votes  cast,  many  not 
voting  on  the  question  either  for  or  against.  STATE  BOARD  OP  TAX 
COMMISSIONERS,  by  E.  H.  Wolcott. 

KANSAS 

''►Topeka,  Oct.  15,  1915. — Dear  Sir:  Your  letter  of  October  9  to  the  Gov¬ 
ernor  of  Kansas  has  been  referred  to  this  office  for  answer,  and  I  am 
now  directed  by  the  tax  commission  to  say  with  reference  to  your  in¬ 
quiries  as  follows:  1.  The  Constitution  of  Kansas  does  impose  the 
“general  property”  tax  system,  (b)  The  classification  of  different  kinds 
of  property  is  not  permitted  by  the  Kansas  Constitution  in  so  far  as  tax 
levies  are  concerned.  The  legislature  may  classify  as  to  methods  of 
assessment,  but  not  as  to  the  amount  levied.  All  property  is  subject  to 
a  uniform  rate  of  levy.  2.  The  existing  revenue  provision  has  been  a 
part  of  the  Kansas  Constitution  since  Kansas  became  a  state,  on  Jan. 
29,  1861.  3.  There  has  not  been  a  pronounced  movement  for  an  amend¬ 
ment  designed  to  give  broader  powers  to  the  legislature.  The  tax  com¬ 
mission  of  the  state  has  recommended  to  every  legislative  session  since 
1908  that  an  amendment  of  the  kind  be  submitted  to  the  people,  and  in 
1913  such  an  amendment  was  submitted,  the  form  of  which  and  the  re¬ 
sult  of  the  vote  [defeating  it]  may  be  found  in  the  Fourth  Report  of  the 
commission  to  the  legislature  at  page  35,  a  copy  of  which  is  sent  you  in 
a  separate  enclosure.  As  yet  the  present  Governor  has  not  officially 
taken  a  position  upon  the  question,  although  in  times  past,  and  it  may  be 
said  at  all  times,  the  Daily  Capital,  of  which  he  is  owner  and  publisher, 
has  supported  the  amendment  designed  to  permit  classification.  CLAR¬ 
ENCE  SMITH,  Secretary. 


44 


LOUISIANA 


Baton  Rouge,  Oct.  8,  1915. — Dear  Sir:  In  reply  to  your  letter  of  the 
1st  instant,  I  beg  leave  to  say  that  I  have  instructed  my  Secretary  to 
prepare  answers  to  the  questions  asked  by  you.  Strenuous  efforts  have 
been  made  to  get  away  from  the  general  property  tax  plan  in  Louisiana. 

*************** 

Powerful  tax-dodgers  and  office-seeking  politicians  have  been  able  to  ob¬ 
struct  every  effort  to  frame  a  sane  and  satisfactory  system,  so  the  state 
will  probably  continue  to  pound  on  the  breakers.  Whenever  a  change  is 
proposed  we  meet  the  cry  that  an  effort  is  being  made  to  increase  taxes. 
It  affords  the  demagogue  an  excellent  opportunity  to  practice  deception. 
My  experience,  study  and  observation  teach  that  the  general  property 
tax  plan  is  the  most  inefficient,  unfair  and  unjust  that  could  be  devised. 
Under  it  no  state  -has  been  able  to  or  can  possibly  meet  the  neces¬ 
sary  demands  of  its  oVn  growth  and  development.  The  wealth  of  the 
state  escapes  its  just  share  of  taxation  and  the  burden  is  shifted  to  the 
poor  man  andjthe  man  of  moderate  means.  The  states  should,  through 
centralized  authority,  retain  efficient  supervision  and  control  at  least  over 
assessments  for. the  purposes  of  state  taxation.  The  legislatures  should 
have  the  power  to  classify  property  and  such  other  powers  as  will  enable 
them  to  meet  conditions  as  they  may  arise.  There  does  not  seeih  to  be 
in  this  state  any  tendency  towards  giving  the  legislature  enlarged  pow¬ 
ers  in  the  matter  of  taxation.  Much  educational  work  will  have  to  be 
done  before  we  can  hope  to  make  any  changes  whatever  in  our  system, 
or,  rather,  lack  of  system.  L.  E.  HALL,  Governor. 

Baton  Rouge,  Oct.  8,  1915. — Dear  Sir:  The  State  of  Louisiana  has  the 
“general  property”  tax  system.  There  is  no  classification.  The  powers 
of  the  General  Assembly,  in  so  far  as  they  affect  the  system  or  any 
classification  of  property,  are  at  the  irreducible  minimum.  The  General 
Assembly  controls  the  license  taxes  and  that  is  about  all.  The  present 
system  was  readopted  by  ordinance  in  the  Constitution  of  1898.  It  had 
existed  for  many  years  previous  to  that.  In  fact,  the  system  has  re¬ 
mained  substantially  the  same  since  the  Civil  War,  and  was  probably 
so  before  that.  A  proposed  amendment  to  the  Constitution  embodying 
a  system  of  which  the  salient  feature  was  the  segregation  of  state  and 
local  sources  of  revenue  was  proposed  and  defeated  in  1912.  The  ‘‘under¬ 
lying  reasons”  were  the  opposition  of  the  tax-dodgers  and  their  political 
allies,  the  use  of  a  secret  slush  fund  raised  by  the  railroads  and  lack  of 
general  education  on  the  subject.  The  Governor  considers  the  classifica¬ 
tion  of  property  an  essential  of  a  just  and  equitable  system.  G.  E. 
MOISE,  Assistant  Secretary. 

MAINE 

Augusta,  Oct.  16,  1915. — Dear  Sir:  Your  letter  of  September  30,  ad¬ 
dressed  to  Governor  Curtis,  has  been  handed  me  for  reply.  Our  State 
Constitution  imposes  upon  the  state  the  general  property  tax  system 
*  and  does  not  permit  classification  of  different  kinds  of  property,  except¬ 
ing  in  one  respect.  By  an  amendment  adopted  in  1914  intangible  per¬ 
sonal  property  may  be  taxed  at  an  arbitrary  rate.  So  far,  no  legislation 
has  been  enacted  under  this  amendment.  There  is  no  very  strong  pub¬ 
lic  sentiment  in  Maine  at  present  for  any  form  of  tax  reform.  Our  dis 
cussion  of  public  questions  are  largely  confined  to  arguing  with  regard 
to  the  merits  and  demerits  of  state-wide  prohibition  and  whether  th4 
prohibitory  law  is  properly  enforced  or  not.  Most  other  public  questions 
have  possessed  only  academic  interest,  to  the  people  of  Maine  for  the 
past  fifteen  or  twenty  years.  Personally  I  am  now  and  have  been  for  a 


45 


TAX  EVILS  CAN  BE  CURED  ONLY  BY  INTEREST  OF  CITIZENS. 


long  time  strongly  in  favor  of  a  Constitutional  Amendment  permitting 
classification  of  different  kinds  of  property  so  that  an  equitable  tax  sys¬ 
tem  might  be  worked  out  in  place  of  the  peculiarly  awkward  and  unjust 
system  imposed  upon  us  by  the  terms  of  our  Constitution.  But  I  do  not 
expect  to  see  any  change  in  that  respect  in  Maine  for  many  years.  W. 
R.  PATTANGALL,  Attorney-General. 

NEBRASKA 

No  reply  has  been  received  from  Nebraska.  Sec.  1  of  Art.  IX, 
Revenue,  of  the  Nebraska  State  Constitution,  however,  is  almost 
verbatim  of  Sec.  1  of  Art.  IX,  Revenue,  of  the  Illinois  State  Con¬ 
stitution,  which  imposes  the  general  property  tax. 

The  bulletin,  1914,  on  Taxation  and  Revenue  Systems  of  State 
and  Local  Governments,  published  by  the  U.  S.  Department  of  Com¬ 
merce,  Bureau  of  the  Census,  gives  this  information : 

Nebraska  draws  its  revenue  mainly  from  the  general  property  tax. 
Corporations  pay  an  occupation  tax  based  on  their  capital  stock  in  addi* 
tion  to  the  property  tax.  Foreign  insurance  companies  pay  a  special 
state  tax.  Considerable  revenue  is  derived  from  fees  and  an  inheritance 
tax.  Poll  taxes  and  practically  all  the  business  taxes  and  licenses  are 
left  to  the  counties  and  municipalities.  All  license  moneys,  fines,  forfeit¬ 
ures  and  penalties,  escheats  and  individual  witness  fees  go  to  the  schools. 

In  the  absence  of  a  direct  response  to  our  questionaire,  we  quote 
from  the  report  of  the  Nebraska  Special  Tax  Commission,  appointed 
by  Governor  John  H.  Morehead,  pursuant  to  legislative  Act  of  1913, 
to  study  defects  of  the  Nebraska  system,  methods  used  in  other  states, 
etc.  On  page  8  that  report  reads: 

Defects  of  the  Tax  Law. — The  chief  defects  of  the  present  law  grow 
out  of  the  attempt  to  raise  nearly  all  the  public  revenues  from  a  tax 
on  all  property  according  to  its  value.  The  law  disregards  all  differ¬ 
ences  in  the  economic  character  of  property,  by  treating  all  the  citizens' 
possessions  as  equally  indicative  of  his  ability  to  support  the  government. 
The  law  fails  to  recognize  the  fact  that  many  professions  and  businesses 
which  yield  a  large  income  require  little  or  no  property,  thus  permitting 
many  to  escape  their  fair  share  of  the  tax  burden. 

It  fails  to  take  account  of  the  great  growth  of  corporate  wealth  by 
providing  the  means  of  reaching  such  wealth  adequately  once,  and  but 
once. 


NEVADA 

Carson  City,  Oct.  11,  1915. — Dear  Sir:  Replying  to  your  letter  of  the 
30th  ultimo,  I  will  say:  First — Our  State  Constitution  provides  the  “uni¬ 
form  rule  of  assessment  and  taxation,”  excepting  only  operating  mines, 
the  net  proceeds  alone  of  which  are  taxed,  and  unworked  patented  claims, 
which  are  taxed  on  a  minimum  basis  of  $500.  Second — The  original  Con¬ 
stitution  was  amended  in  1906  to  provide  for  the  tax  on  unworked 
patented  mines,  but  has  not  been  changed  otherwise  in  so  far  as  it  per¬ 
tains  to  taxation.  Third — I  introduced  a  resolution  in  the  last  session 
of  the  legislature  providing  for  the  amendment  of  Article  X  to  permit 
of  a  classified  assessment,  but  the  measure  was  decisively  beaten.  Fourth 
—There  has  been  no  amendment  calling  for  general  classification  sub- 


46 


mitted  to  the  people  in  Nevada.  I  am  heartily  in  favor  of  giving  the 
state  legislature  the  right  to  classify  property  for  assessment.  The  gen¬ 
eral  property  tax  applied  under  the  uniform  rule  of  assessment  is  un¬ 
scientific  and  unjust  and  I  hope  to  see  Nevada  take  the  first  steps  in  re¬ 
jecting  it  at  the  next  session  of  the  legislature.  EMMET  D.  BOYLE, 
Governor. 

NEW  HAMPSHIRE 

Concord,  Oct.  15,  1915. — Dear  Sir:  In  reply  to  your  letters  of  inquiry 
of  September  30  and  October  9,  the  revenue  provision  in  our  State  Con¬ 
stitution  has  retained  its  original  form  from  the  first  adoption  of  the 
Constitution  in  1783.  It  requires  “proportional  and  reasonable  assess¬ 
ments,  rates  and  taxes,”  and  the  courts  have  held  that  this  does  not 
permit  classification  of  property  for  the  purposes  of  such  taxation.  Per¬ 
sonally,  I  am  heartily  in  favor  of  such  classification  and  I  think  that  a 
large  majority  of  the  people  of  the  state  have  a  similar  feeling.  In 
1912  the  people  were  asked:  “Do  you  approve  of  empowering  the  legis¬ 
lature  to  specially  assess,  rate  and  tax  growing  wood  and  timber  and 
money  at  interest?”  The  vote  was:  Yes,  23,108;  No,  12,636;  and  as  a 
two-thirds  vote  is  required  for  the  adoptidn  of  an  amendment  to  the  Con¬ 
stitution  the  proposition  failed.  ROLL  AND  H.  SPAULDING,  Governor. 

NEW  JERSEY 

Trenton,  Oct.  6,  1915. — Dear  Sir:  Governor  Fiedler  directs  me  to  reply 
to  yours  of  the  30th  ult.  The  amendment  of  1875  to  the  State  Constitu¬ 
tion  provides  that  “Property  shall  be  assessed  for  taxes  under  general 
laws  and  by  uniform  rules,  according  to  its  true  value.”  (Art.  IV,  Sec. 
7,  Par.  12.)  This  is  the  first  limitation  of  the  taxing  power  to  be  found 
in  the  organic  law  of  New  Jersey,  and  prohibits  all  special  or  local  legis¬ 
lation  on  this  subject.  There  has  been  no  amendment  to  the  Constitu¬ 
tion  relative  to  taxation  since  the  provision  above  set  forth,  nor  has 
there  been  any  movement  in  favor  of  changing  the  present  Constitutional 
requirements  in  this  respect.  We  have  the  general  property  tax  in  this 
state,  but  there  are  also  certain  classifications,  such,  for  instance,  as  stock 
in  national  or  state  banks,  which  is  separately  assessed  under  Chapter 
90,  Laws  of  1914,  and  property  used  for  railroad  and  canal  purposes, 
which  is  separately  assessed  by  the  (State  Board  of  Taxes  and  Assess¬ 
ments,  formerly  the  State  Board  of  Assessors.  SECRETARY  TO  THE 
GOVERNOR. 

Trenton,  Nov.  23,  1915. — Dear  Sir:  I  have  your  letter  of  the  7th  of 
November,  enclosing  a  copy  of  a  proposed  amendment  of  the  Constitu¬ 
tion  of  Illinois  to  be  voted  upon  in  1916,  which  is  designed  to  permit  a 
classification  of  personal  property  for  taxation,  and  asking  for  an  ex¬ 
pression  of  my  views  thereon.  The  provision  of  the  Constitution  of  New 
Jersey  with  respect  to  taxation  reads,  “Property  shall  be  assessed  for 
taxes  under  general  laws,  and  by  uniform  rules,  according  to  its  true 
value.”  We  thus  have  the  system  of  the  general  property  tax  in  New 
Jersey.  Under  our  constitutional  property  tax,  however,  attempts  at 
classification  have  been  made  and  sustained  by  the  courts.  *  *  *  It 

will  be  generally  conceded  by  those  who  have  had  practical  experience 
with  the  administration  of  taxing  systems  that  classification  is  absolutely 
>  essential  to  a  proper  assessment  of  personal  property.  I  personally  re¬ 
gard  it  as  one  of  the  most  important  steps  that  can  he  taken  in  the  direc¬ 
tion  of  an  equitable  distribution  of  the  tax  burden.  The  Board  of  Equal¬ 
ization  of  Taxes  of  New  Jersey,  which  was  the  predecessor  of  the  present 
State  Board  of  Taxes  and  Assessment,  strongly  recommended  in  its  re¬ 
port  for  1911  that  intangible  personal  property  be  classified  for  the  pur¬ 
poses  of  taxation,  and  that  specific  rates  be  applied  to  the  several  classes. 
I  am  sure  the  people  of  Illinois  will  ratify  the  proposed  amendment  to 
their  Constitution,  if  they  once  grasp  its  real  significance.  Very  truly 


47 


GET  THE  ORGANIZATIONS  YOU  BELONG  TO  TO  STUDY  THIS. 


yours,  FRANK  B,  JESS,  Member  State  Board  of  Taxes  and  Assessments; 
President  Former  Board  of  Equalization  of  Taxes  of  New  Jersey. 

SOUTH  CAROLINA 

[Answers  Interpolated  in  Capitals] 

Oct.  9,  1915. — Hon.  R.  I.  Manning,  Governor,  Columbia,  S.  C. — Dear  Sir: 
On  September  30  we  wrote  respectfully  asking  for  answers  to  the  fol¬ 
lowing  questions:  Does  your  State  Constitution  impose  the  “general 
property”  tax  system?  YES.  Or  does  it  permit  of  classification  of  dif¬ 
ferent  kinds  of  property?  NO.  Does  it  give  your  legislature  broad  pow¬ 
ers  in  enactments  affecting  taxation?  NO.  How  long  has  the  existing 
revenue  provision  been  embodied  in  your  Constitution?  1868.  If  the 
Constitution  does  not  permit  classification,  is  there  a  pronounced,  move¬ 
ment  for  an  amendment  thereto  designed  to  give  broader  powers  to  the 
legislature  in  this  direction?  SOUTH  CAROLINA  TAX  COMMISSION 
WILL  NAME  RECOMMENDATIONS  AT  NEXT  SESSION  OF  GENERAL 
ASSEMBLY.  Has  any  such  amendment  been  voted  on  by  the  people,  or 
suggested  in  recent  years?  NO.  What  was  its  scope?  Was  it  rejected 
or  adopted,  and  if  rejected,  what  appeared  to  be  the  underlying  reason 
for  such  rejection?  Do  you  favor  giving  the  legislature  broad  powers 
as  to  classification  or  non-classification  of  property?  YES.  CLASSIFI¬ 
CATION  OF  PROPERTY.  [Signed  by  the  Governor’s  Secretary.] 

SOUTH  DAKOTA 

Pierre,  Oct.  2,  1915. — Dear  Sir:  Your  communication  of  the  30th  ult., 
addressed  to  Governor  Byrne,  has  been  referred  to  this  office  for  reply. 
The  present  Constitution  of  this  state  does  impose  the  “general  prop¬ 
erty”  tax  system.  The  “equality”  provisions  are  strict,  and  in  some 
cases  very  specific.  Under  separate  cover  we  hand  you  pamphlet  con¬ 
taining  an  annotated  copy  of  the  Constitution,  issued  two  years  ago. 
You  will  b6  able  to  follow  the  sections  through  the  maze  of  annotations 
by  carefully  watching  the  section  sign  (§).  This  Constitution  is  in  most 
particulars  the  same  as  originally  adopted  in  1889.  At  the  general  elec¬ 
tion  of  1912  an  amendment  was  adopted,  changing  Sec.  2,  Art.  XI,  in 
such  a  manner  that  it  was  hoped  would  allow  the  State  Equalization 
Board  to  determine  the  valuation  of  express  companies  in  a  satisfactory 
amount.  No  other  radical  changes  have  been  made  in  the  revenue  pro¬ 
visions  since  adoption.  An  amendment  was  proposed  by  the  legislature 
of  1909  which  its  advocates  contended  would  give  the  legislature  the 
right  to  meet  popular  demands  for  reformation  of  taxation  laws.  Sec. 

4  of  the  proposed  article  granted  power  to  enact  legislation  classifying 
inheritances  and  levying  graduated  or  progressive  taxes  thereon.  Sec. 

5  read:  “The  legislature  shall  classify  incomes  in  respect  to  the  re¬ 
cipients  thereof,  and  provide  for  a  graduated  or  progressive  tax  thereon 
with  such  exemptions  as  it  may  prescribe.”  However,  the  amendment 
went  down  in  a  general  “Vote  No”  campaign,  along  with  other  amend¬ 
ments  proposed.  You  will  find  the  proposed  amendment  on  page  287, 
Sessions  Laws  of  1909.  The  views  of  this  Commission  on  the  desirability 
of  repealing  the  present  restrictive  .provisions,  and  substituting  therefor 
some  simpler,  saner  and  sounder  plan  of  assessment  and  taxation,  are  to 
be  found  in  the  copy  of  our  First  Biennial  Report,  which  goes  forward 
to  you  under  separate  cover.  The  enclosed  Joint  Resolution  was  adopted 
by  the  last  legislature,  in  the  amended  form  indicated,  by  a  good  ma¬ 
jority  without  serious  opposition  in  any  quarter,  and  it  is  hoped  by 
all  those  really  interested  in  our  problems  that  it  will  be  adopted  at 
the  General  Election  of  1916.  C.  HENRY,  Tax  Commissioner. 

An  amendment  to  Article  XI  of  the  State  Constitution  of  South 
Dakota  has  been  submitted  by  the  Legislative  Assembly  and  will  be 
voted  upon  in  November,  1916.  The  sections  of  the  revised  article 

48 


which  will  abolish  the  general  property  tax  and  permit  classification, 
if  the  amendment  is  ratified  by  the  voters,  are  as  follows : 

Article  XI,  Revenue  and  Finance,  Sec.  1.  The  legislature  shall  .provide  for 
an  annual  tax  sufficient  to  defray  the  estimated  ordinary  expenses  of  the  state 
for  each  year,  not  to  exceed  in  any  one  year  an  average  of  two  mills  on  the 
total  assessed  valuation  of  all  taxable  property  in.  the  state,  to  be  ascertained 
by  the  last  assessment  made  for  state  and  county  purposes. 

Sec.  2.  Taxes  shall  be  levied  and  collected  for  public  purposes  only  and 
shall  be  uniform  upon  air  property  of  the  same  class,  and  ail  taxes  shall  be 
levied  and  collected  by  general  law.  The  legislature  shall  have  power  to  divide 
property  into  classes  and  to  determine  what  class  or  classes  of  property  shall 
be  subject  to  taxation.  Taxes  may  be  imposed  on  incomes,  privileges,  and  oc¬ 
cupations,  which  taxes  may  be  graduated  and  progressive,  and  reasonable  ex¬ 
emptions  may  be  provided;  franchises  and  licenses  to  do  business  in  the  state, 
gross  earnings  and  net  income  may  be  considered  in  taxing  persons,  firms,  joint 
stock  companies,  associations,  co-partnerships,  or  corporations.  *  *  * 

Sec.  8.  The  legislature  may  vest  the  corporate  authority  of  cities,  towns, 
and  villages  with  power  to  make  local  improvements  by  special  taxation  of 
contiguous  property  or  otherwise.  For  all  corporate  purposes  all  municipal 
corporations  may  be  vested  with  authority  to  assess  and  collect  taxes;  but 
such  tax  shall  be  uniform  on  the  same  class  of  subjects.  •  *  * 

UTAH 

Salt  Lake  City,  Oct.  15,  1915.— -Dear  Sir;  Your  favor  of  September  30 
to  Governor  Spry  of  Utah,  making  inquiry  as  to  certain  tax  conditions 
and  laws  in  this  state,  has  been  forwarded  to  this  office  for  reply.  An¬ 
swering  your  first  question,  I  have  to  say  that  our  State  Constitution  does 
impose  a  general  property  tax,  and  does  not  permit  classification  of  the 
subjects  of  taxation.  We  think  our  Constitution  is  very  restrictive  in  its 
provisions  relative  to  taxation;  in  fact,  it  is  typical  of  all  the  State  Con¬ 
stitutions  of  the  western  states.  Question  No.  2 — The  present  revenue 
provisions  of  our  State  Constitution  are  practically  the  same  as  when 
the  state  was  admitted  in  1896.  Question  No.  3 — There  has  been  some 
effort  to  secure  classification  of  property  for  purposes  of  taxation,  al¬ 
though  so  far  such  effort  seems  to  be  confined  largely  to  taxing  officials. 
In*  1911  the  legislature  adopted  a  resolution  submitting  to  the  electors  the 
'proposition  to  provide  for  classification,  but  the  resolution  was  defeated  at 
the  election  in  the  fall  of  1912  and  the  proposition  failed.  A  resolution 
providing  for  classification  was  again  adopted  by  the  legislature  of  1915 
and  will  be  voted  upon  in  1916.  Question  No.  4 — The  resolution  gave 
broader  powers  to  the  legislature;  in  fact,  permitted  it  to  make  any 
classification  it  saw  fit,  also  to  make  exemptions  without  limit.  Question 
No.  5 — The  defeat  of  the  resolution  in  1913  is  believed  to  be  due  to  the 
fact  that  the  people  did  not  understand  its  purpose,  also  to  their  dislike 
of  voting  something  that  they  did  not  know  the  results  of.  And,  further, 
there  were  other  amendments  proposed  at  the  same  time  that  were  ob¬ 
jectionable  to  certaia  interests,  and  they  took  the  attitude  that  the 
amendments  as  a  whole  meant  additional  taxation  (which  was  not  true), 
thus  bringing  about  the  defeat  of  all  the  amendments.  Answering  your 
request  for  an  expression  of  opinion  as  to  the  desirability  of  permission 
or  inhibition  of  classification,  while  I  do  not  presume  to  speak  for  the 
Governor,  I  may  say  that  the  people  of  this  state,  as,  I  presume,  is  the 
case  in  all  other  states,  have  varying  views  on  the  subject,  varying  all 
the  way  from  the  single  tax  to  the  taxation  of  all  property  regardless 
of  its  ownership  or  conditions,  yet  the  principal  idea  or  desire  of  the 
advocates  of  classification  so  far  has  been  the  wish  to  permit  the  taxa¬ 
tion  of  money  and  solvent  credits — in  fact,  all  intangible  personal  prop¬ 
erty — at  a  lower  rate  than  is  levied  against  tangible,  visible  property 
generally.  At  present,  although  our  Constitution  and  law  require  the 
assessment  of  all  property,  this  intangible  personal  property  escapes 
almost  entirely,  the  exception  being,  of  course,  an  injustice  to  the  tax¬ 
payer  so  assessed,  and  the  purpose  of  the  proponents  of  the  pending  Con¬ 
stitutional  Amendment  seek  to  give  authority  to  the  legislature  to  im- 
PQse  either  a  lower  rate  against  this  class  of  property,  thereby  inviting 
it  to  come  out  of  its  hiding  place,  or  to  exempt  it  entirely.  Personally,  I 


49 


BOOST  FOR  UNIFORMITY,  EQUALITY  AND  JUSTICE  IN  TAXATION. 


am  of  the  opinion  that  the  levying  of  a  lower  rate  against  this  property 
will  not  reach  the  end  desired,  that  is,  not  of  itself,  although  it  might  be 
possible,  through  renewed  and  extra  effort  on  the  part  of  taxing  officials 
under  the  new  plan,  to  get  much  more  property  of  this  kind  on  the  tax 
rolls.  And  if  such  should  prove  to  be  the  case,  then  I  would  be  in  favor 
of  exempting  this  class  of  property  entirely. — ’HARDEN  BENNION,  Sec¬ 
retary,  State  Board  of  Equalization. 

Salt  Lake  City,  Oct.  23,  1915. — Dear  Sir:  This  is  to  acknowledge  re¬ 
ceipt  of  your  favor  of  the  18th  and  the  enclosed  bulletins,  for  which  I 
thank  you.  I  am  pleased  to  note  the  very  flattering  prospects  of  success 
for  the  efforts  of  the  friends  of  tax  reform  in  Illinois.  A  very  learned 
friend  of  mine  said  to  me  recently  that  the  makers  of  the  Constitution  of 
our  state  apparently  thought  that  all  wisdom  would  perish  with  them, 
hence  wrote  into  it  so  much  legislation  on  the  subject  of  taxation  that 
the  legislature  is  very  much  handicapped  in  its  efforts  to  accomplish  the 
very  necessary  reforms  of  to-day.  I  trust  the  proposed  amendment  to 
yours  will  prevail.  On  the  point  upon  which  1  failed  to  make  myself 
clear  in  my  former  letter,  I  now  wish  to  say  that  I  certainly  believe  that 
the  legisature  should  have  power  to  classify  property  for  the  purposes  of 
taxation  and  that  a  lower  rate  should  be  applied  to  intangible  personal 
property  than  is  charged  against  real  estate  and  tangible  property;  this 
as  a  matter  of  economic  justice  and  as  a  means  of  securing  the  listing 
of  this  class  of  property  for  taxation,  it  being  very  certain  that  a  high 
rate  of  taxation  upon  property  that  can  be  so  readily  concealed,  is  con¬ 
ducive  to  its  being  hidden  from  the  assessor.  As  an  alternative  method 
of  taxation  of  this  class  of  property  I  am  in  favor  of  stamp  taxes  or 
mortgage  recording  fees  sufficient  to  make  this  class  of  property  pay 
some  part,  at  least,  of  the  expenses  of  government;  and  finally,  as  a 
third  alternative,  I  would  rather  see  this  class  of  property  exempted  en¬ 
tirely  by  law,  than  to  see,  as  we  often  do  here,  the  estates  of  widows  and 
orphans,  or  rather  the  property  coming  to  them  through  the  estates  of 
others,  taxed  at  full  value,  being  a  matter  of  record  through  court  pro¬ 
ceedings,  and  at  very  high  rates,  as  high  sometimes  as  six  per  cent; 
while  all  other  property  of  this  class  escapes  entirely.  HARDEN  BEN¬ 
NION,  Secretary. 

WYOMING 

Cheyenne,  Nov.  8,  1915. — Dear  Sir:  I  have  been  absent  from  Chey¬ 
enne  for  some  time,  and  on  my  return  find  yours  of  October  25.  In 
reply  to  same,  I  am  sorry  to  have  to  say  that  Sec.  11  of  Art.  15  of 
our  state  Constitution  is  generally  construed  as  prohibiting  our  state 
legislature  from  classifying  property  for  the  purpose  of  taxation.  Our 
Constitution  will  have  to  be  amended  before  property  can  be  classified, 
and  the  question  has  never  been  submitted  to  the  people  for  their 
action.  I  believe  it  would  be  a  great  improvement  if  our  legislature 
had  the  power  to,  and  would,  classify  property  for  taxation  purposes. 
Trusting  this  may  give  you  the  information  desired,  I  am,  JOHN 
McGILL,  Commissioner  of  Taxation. 

Replies  received  from  Alabama.,  Mississippi,  Missouri,  Montana, 
North  Carolina,  Ohio,  Oregon,  Tennessee  and  Texas,  give  the  informa¬ 
tion  that  the  Constitutions  of  these  states  impose  the  general  property 
tax,  and  that  in  North  Carolina,  Ohio,  Oregon  and  Tennessee,  some 
effort  has  been  made  toward  making  a  change.  As  these  letters  throw 
no  important  light  on  the  situation,  they  are  omitted.  They  are  on 
file  in  the  office  of  the  Federation. 

It  has  been  impossible  to  elicit  replies  from  Arkansas,  Idaho,  Wash¬ 
ington  and  West  Virginia. 

Of  all  the  replies  received  from  general  property  tax  states,  that  of 
Governor  Tramiiiell  of  Florida  alone  expresses  a  preference  for  the 
old  system.  50 


PART  III— GENERAL  EXPERT  OPINION 

LETTERS 

The  following  responses  to  requests  for  comment  on  the  pending 
Revenue  Amendment  to  the  Illinois  Constitution  have  been  received 
by  the  Civic  Federation  from  tax  authorities  and  experts  of  national 

reputation : 

Northwestern  University,  Chicago,  Nov.  17,  1915. — My  Dear  Sir:  I 
am  in  favor  of  the  Proposed  Amendment  relating  to  personal  prop¬ 
erty  tax.  The  present  situation  is  immoral,  unjust  and  ineffective. 
It  is  immoral  because  by  its  excessive  demands  it  leads  to  a  very 
general  attempt  to  escape  the  requirements  of  the  law.  It  is  extor¬ 
tionate,  for  it  calls  for  a  tax  in  some  cases  equivalent  to  an  income 
tax  of  25  per  cent  or  more,  and  it  is  uneven  in  its  distribution,  throw¬ 
ing  undue  weight  upon  those  whose  income  is  derived  from  personal 
property.  It  is  ineffective  because  it  yields  much  less  than  a  more 
moderate  and  more  scientific  system  would  produce.  A.  W.  HARRIS, 
President.  To  Mr.  Joseph  E.  Otis,  President  The  Civic  Federation. 


University  of  Illinois,  President’s  Office,  Urbana-Champaign,  NoV.  23, 
1915. — Joseph  E.  Otis,  Esq.,  Civic  Federation  of  Chicago,  Chicago.  My 
Dear  Mr.  Otis:  In  answer  to  your  letter  of  November  16  asking  my 
opinion  about  the  pending  amendment  of  the  Revenue  Article  of  the 
Illinois  Constitution,  I  may  say  that  I  have  already  expressed  my 
opinion  that  it  is  desirable  to  adopt  such  an  amendment  in  the  report 
of  the  Illinois  Tax  Commission,  of  which  I  was  a  'member.  Faith¬ 
fully  yours,  EDMUND  J.  JAMES. 

Illinois  State  Normal  University,  Normal,  Ill.,  Jan.  4,  1916. — Dear  Sir:  I 
hartily  approve  of  the  Pending  Amendment  to  the  Constitution.  It  is  not 
by  any  means  as  compreliensiv  an  Amendment  to  our  State  Constitution 
as  we  ought  to  hav,  nor  wil  it  produce  a  thorogoing  reform  in  taxation, 
but  our  taxing  system  in  Illinois  is  so  intolerably  bad  that  almost  any 
change  is  an  improvement.  Cordially  yours,  DAVID  FELtMGUEY. 


The  University  of  Chicago,  Office  of  the  President,  Chicago,  Nov. 
20,  1915. — Dear  Sir:  Your  favor  of  the  16th  inst.  with  enclosure  is 
received.  The  suggested  amendment  is  in  the  direction  of  reform  of 
a  very  bad  situation,  and  I  should  hope  that  it  might  be  adopted. 
I  regret  that  it  did  not  go  very  much  farther,  but  suppose  that  this 
is  all  that  could  be  done  at  the  time.  Very  truly  yours,  HARRY 
PRATT  JUDSON.  To  Mr.  Joseph  E.  Otis,  the  Civic  Federation. 


[From  Mr.  Foote,  Founder  and  First  President  of  the  National  Tax 

Association.] 

Columbus,  O.,  July  24,  1915. — Douglas  Sutherland,  Secretary  The 
Civic  Federation,  Chicago,  Ill. — My  Dear  Sir:  I  wish  to  commend  the 
well-devised  Taxation  Constitutional  Amendment  submitted  to  the  peo¬ 
ple  for  adoption.  A  well-defined  movement  has  been  developed  in 
many  states  to  secure  amendments  to  their  respective  constitutions, 
enabling  legislatures  to  exercise  broader  powers  in  dealing  with  taxa¬ 
tion  problems.  All  of  these  proposals,  like  your  own,  are  designed  to 
secure  liberty  of  action  through  permitting  freedom  in  the  classiflca- 

61 


BOOST  THE  TAX  AMENDMENT. 


tion  of  the  subjects  of  taxation  in  conformity  with  their  economic 
characteristics.  Several  states  have  always  enjoyed  this  freedom  of 
action,  and  several  others  have  acquired  it  through  amending  their 
Constitutions.  While,  the  whole  trend  of  development  throughout  the 
country  is  toward  greater  freedom,  in  no  state  has  a  demand  arisen 
to  restrict  the  freedom  allowed.  In  my  judgment,  the  adoption  of  the 
Proposed  Amendment  is  absolutely  necessary  to  enable  the  legislature 
of  your  state  to  enact  laws  revising  the  taxation  system  now  in  force 
in  a  way  that  will  remedy  its  defects  and  place  your  state  in  a  posi¬ 
tion  to  finance  its  public  affairs,  state  and  local,  in  a  way  that  will 
be  both  helpful  and  satisfactory  to  its  citizens.  For  the  good  of  your 
state,  I  sincerely  hope  every  elector  will  vote  “yes”  on  this  Proposed 
Amendment  at  the  next  election.  Sincerely  yours,  ALLEN  R.  FOOTE. 


[From  Prof.  Seligman,  President  National  Tax  Association,  1914-15.] 


Columbia  University,  in  the  City  of  New  York,  Faculty  of  Political 
Science. — Mr.  Douglas  Sutherland,  Secretary  The  Civic  Federation, 
804  The  Temple,  Chicago.  Dear  Sir:  In  reply  to  your  letter  of  July 
22,  and  addressed  to  me  as  president  of  the  National  Tax  Association, 
I  would  say  that  I  am  replying  not  in  my  official  capacity,  but  only 
as  an  individual.  It  goes  without  saying  that  I  am  in  favor  of  any¬ 
thing  wrhich  will  free  us  from  the  continuance  of  the  general  prop¬ 
erty  tax  as  it  is  levied  in  Illinois,  as  well  as  in  many  other  states. 
As  I  have  repeatedly  stated,  the  general  property  tax  is  an  anachron¬ 
ism.  It  is  a  survival  of  an  earlier  economic  stage.  It  is  impossible 
of  success  under  modern  conditions,  and  it  has  been  abandoned  by 
every  great  industrial  country  except  the  United  States.  An  amend¬ 
ment  to  the  Constitution  which  will  permit  of  the  classification  of  per¬ 
sonal  property  will  be  a  decided  step  in  advance,  in  the  direction  of 
greater  justice  in  taxation.  If  you  are  prepared  for  the  still  further 
step  to  which  I  refer  in  my  presidential  address  this  year  for  the 
National  Tax  Association — that  is,  for  permission  to  substitute  income 
for  property  as  the  basis  of  taxation — it  would  be  still  better.  But 
anything  that  will  free  us  from  the  absurd  and  inequitable  general 
property  tax  is  to  be  welcomed.  Faithfully  yours,  EDWIN  R.  SELIGMAN. 


[From  Samuel  T.  Howe,  Former  Vice-President,  Now  President,  National 

Tax  Association.] 

Topeka,  Kan.,  July  26,  1915. — Mr.  Douglas  Sutherland,  Secretary  The 
Civic  Federation,  Chicago,  Ill.  Dear  Sir:  In  response  to  your  letter 
of  the  22nd  inst.,  I  have  to  say  that  I  am  decidedly  in  favor  of  the 
classification  of  property  for  purposes  of  taxation.  One  need  think 
only  for  a  moment  of  the  varying  economic  characteristics  of  prop¬ 
erty  to  reach  this  conclusion,  and  the  careful  observer  is  forced  to 
conclude  that  this  is  a  fundamental  proposition  in  taxation  if  it  be 
desired  to  distribute  the  burden  in  a  relatively  equal  manner  among 
property  owners.  An  open-minded  person  will  see  at  once  that  the 
share  of  stock  issued  by  a  bank  which  pays  the  owner  a  24  per  cent 
dividend  is  much  more  valuable  than  the  share  that  pays  only  a  6 
per  cent  dividend,  and  that  the  owner  of  the  former  may  be  justly 
charged  a  larger  rate  than  the  owner  of  the  share  paying  the  smaller 
dividend.  Again,  a  demand  upon  the  owner  of  either  of  the  shares 
would  evidently  be  more  justifiable  than  one  upon  the  owner  of  house¬ 
hold  furniture,  which  property  is  unproductive  and  deteriorates  con¬ 
stantly  with  use  and  is  really  confiscated  by  taxation.  Innumerable 
instances  of  the  lack  of  economic  harmony  among  the  classes  of  prop¬ 
erty  might  be  given,  but  the  above  are  sufficient.  *Inclosed  is  a  copy 
of  some  matter  put  forth  last  year  by  the  Commission  of  Kansas 
upon  the  subject.  This  circular  was  the  only  effort  made  to  enlighten 
the  public  upon  the  question  pending.  The  Commission  was  without 
means  to  make  a  campaign  and  did  not  have  the  time.  It  is  believed 


52 


that  if  the  matter  were  now  submitted  it  would  carry.  Yours  truly, 
SAM’L  T.  HOWE. 

♦See  letter  from  Secretary  to  the  Governor  of  Kansas,  page  44. 

[From  Prof.  Adams,  Now  Professor  of  Economics,  Cornell  University, 
Formerly  Tax  Commissioner  Wisconsin.] 

National  Tax  Association,  Madison,  Wis.,  July  24,  1915. — Douglas 
Sutherland,  Secretary  The  Civic  Federation  of  Chicago,  Chicago.  Dear 
Sir:  I  have  read  the  amendment  to  the  Revenue  Article  of  the  Con¬ 
stitution  of  Illinois,  to  be  submitted  to  the  voters  of  that  state  at 
the  next  general  election.  An  outsider  can  seldom  speak  with  entire 
confidence  concerning  the  tax  system  of  another  state;  but  in  this 
case  the  questions  involved  are  so  general  that  I  have  no  hesitancy  in 
expressing  the  opinion  that  the  adoption  of  this  Constitutional  Amend¬ 
ment  would  result  in  a  material  improvement  of  the  tax  system  of 
Illinois.  At  least  nine-tenths  of  the  men  who  have  administered  tax 
laws,  or  who  have  given  serious  study  to  the  operation  of  tax  laws, 
agree  that  the  same  rate  of  taxation  ought  not,  and  in  practice  cannot, 
be  applied  to  real  estate  and  all  forms  of  personal  property.  The 
ordinary  rate  of  taxation,  if  imposed  upon  securities,  would  take  from 
25  to  50  per  cent  of  the  income  derived  from  such  securities.  Uni¬ 
versal  experience  shows  that  a  tax  so  extortionate  cannot  be  col¬ 
lected.  There  is  real  necessity,  therefore,  for  different  treatment  of 
securities  and  tangible  personal  property.  Experience,  moreover,  in 
other  states  shows  that  if  the  legislature  is  permitted  to  impose  a 
different  and  more  reasonable  rate  on  securities  a  larger  amount  of 
tax  revenue  can  in  practice  be  derived  from  that  source.-  The  Pro¬ 
posed  Constitutional  Amendment  is  not  radical  in  any  sense;  it  per¬ 
mits  no  departure  from  old  practice  that  is  not  thoroughly  endorsed 
by  American  experience  and  authorities;  it  moves  in  the  right  direc¬ 
tion  without  moving  fast  enough  to  alarm  conservative  minds  who 
believe  in  making  progress  slowly  and  surely;  it  can  harm  no  interest 
but  may  greatly  benefit  everyone  concerned.  It  should  have,  in  my 
opinion,  the  earnest  support  of  all  interests  in  the  state.  Yours  very 
truly,  T.  S.  ADAMS,  Secretary. 

[From-  Mr.  Purdy,  Prest.  Dept,  of  Taxes  and  Assessments,  N.  Y.  City.] 

July  9,  1913. — My  Dear  Mr.  Sutherland:  I  received  your  note  of  the 
22d,  enclosing  the  amendment  to  the  Revenue  Article  of  the  Illinois 
Constitution  permitting  the  classification  of  personal  property.  I  sin¬ 
cerely  hope  you  may  succeed  in  obtaining  for  this  amendment  the 
apjfroval  of  the  people.  I  am  somewhat  familiar  with  the  distressing 
conditions,  especially  in  Chicago,  produced  by  the  present  constitu¬ 
tional  requirement  that  all  property  shall  be  assessed  and  taxed  in 
the  same  manner  at  its  full  value.  I  am  sorry  that  it  has  been 
impracticable  to  amend  the  Constitution  by  the  omission  of  the  words 
which  restrict  the  power  of  the  legislature  in  the  matter  of  taxation, 
but  welcome  any  removal  of  restrictions.  It  has  long  been  evident 
to  practically  all  students  of  the  subject  that  the  attempt  to  tax 
personal  property  in  proportion  to  its  value  in  the  same  manner  as 
real  estate  is  impracticable,  unequal  and  unjust.  It  is  clear  that  such 
a  law  cannot  be  enforced,  and  the  attempt  to  enforce  it  is  detrimental 
to  the  interests  of  all  the  people.  If  the  Constitution  of  Illinois  is 
amended  as  proposed  the  condition  cannot  be  worse  than  at  present, 
and  I  believe  is  certain  in  the  near  future  to  be  better;  meantime, 
the  educational  effect  upon  the  people  of  the  discussion  of  taxation 
which  will  follow  will  be  of  great  value  to  the  state.  Yours  very 
truly,  LAWSON  PURDY. 


[From  Prof.  Chas.  J.  Bullock,  Vice-President,  National  Tax  Association.] 
Harvard  University,  Department  of  Economics,  Cambridge,  Mass., 
Nov.  12,  1915. — Dear  Sir:  I  have  received  the  copy  of  the  taxation 

53 


amendment  which  will  be  voted  upon  in  Illinois  next  year,  and  am 
glad  to  give  it  my  hearty  endorsement.  It  will  give  to  the  legislature 
the  constitutional  power  to  make  needed  changes  in  the  tax  laws  of 
Illinois.  *  *  *  We  have  just  adopted  in  Massachusetts  an  amendment 

authorizing  the  imposition  of  an  income  tax  and  the  exemption  from 
taxation  of  property  taxed  upon  its  income.  We  were  able  to  enlist  in 
behalf  of  this  the  Massachusetts  Federation  of  Labor,  leaders  of  the 
Grange  and  other  similar  organizations.  Very  truly  yours,  CHARLES 
J.  BULLOCK.  To  Mr.  Douglas  Sutherland. 


OTHER  FACTS  AND  OPINIONS 

The  following  is  from  an  opinion  delivered  by  the  United  States 
Supreme  Court,  as  indicated  by  the  reference  cited : 

[142  U.  S.,  Justice  Lamar,  Pac.  Express  Co.  vs.  Seibert,  p.  351-352.] 

This  court  has  repeatedly  laid  down  the  doctrine  that  diversity  of 
taxation,  both  with  respect  to  the  amount  imposed  and  the  various  spe¬ 
cies  of  property  selected,  either  for  bearing  its  burdens  or  for  being  ex- 
J  empt  from  them,  is  not  inconsistent  with  a  perfect  uniformity  and  equal¬ 
ity  of  taxation  in  the  proper  sense  of  these  terms;  and  that  a  system 
which  imposes  the  same  tax  upon  every  species  of  property,  irrespective 
of  its  nature  or  condition  or  class,  will  be  destructive  of  the  principle 
of  uniformity  and  equality  in  taxation  and  of  a  just  adaptation  of  property 
to  its  burdens. 


The  following  resolution  was  adopted  at  the  ninth  annual  confer¬ 
ence  of  the  National  Tax  Association,  held  in  San  Francisco,  Cal., 
Aug.  8-14,  1915,  in  response  to  requests  from  delegates  of  states  in 
which  classification  tax  amendments  were  pending: 

Whereas,  The  greatest  inequalities  have  arisen  from  laws  designed  to 
tax  all  the  widely  differing  classes  of  property  in  the  same  way  and  such 
laws  have  been  ineffective  in  the  production  of  revenue,  and, 

Whereas,  The  appropriate  taxation  of  various  forms  of  property  is 
rendered  impossible  by  the  restrictions  upon  the  taxing  power  contained 
In  the  constitution  of  many  of  the  states, 

Resolved,  That  all  state  constitutions  requiring  the  same  taxation  of 
all  property  or  otherwise  imposing  restraints  upon  the  reasonable  classifi¬ 
cation  of  property,  should  be  amended  by  the  repeal  of  such  restrictive 
provisions. 


Extracts  from  an  address  before  the  National  Tax  Association,  1914, 
by  W.  Hastings  Lyon,  counsel  of  committees,  Investment  Bankers’ 
Association  of  America,  New  York : 

Summary  of  Conclusions:  This  report  advocates  the  taxation  of  all  Intan¬ 
gibles,  stocks,  bonds,  mortgages,  notes,  on  the  same  basis,  and  calls  attention 
to  the  present  discrepancies  in  treatment.  But  it  expresses  the  opinion  that  a 
state  should  entirely  exempt  its  own  state  and  municipal  bonds  from  taxation. 
It  advocates  that  the  taxation  be  at  a  low  fixed  rate,  or  at  a  rate  placed  at  a 
low  fixed  proportion  of  the  general  tax  on  wealth.  It  advocates  a  tax  that 
should  not  be  exclusively  a  state  tax,  but  one  that  would  give  the  local  com¬ 
munity  Its  share.  It  advances  the  opinion  that  the  rate  under  present  circum¬ 
stances  ought  not  be  in  excess  of  1.5  or  2  mills  per  annum,  i.  e.,  $1.50  or  $2  on 
a  security  of  the  market  value  of  $1,000. 

I  would  personally  advocate  the  taxation  of  securities  at  a  low  annual  rate, 
the  tax  to  be  a  source  of  local  and  not  exclusively  a  source  of  state  revenue. 
Just  what  the  rate  of  tax  ought  to  be  cannot  be  a  matter  of  a  scientifically 


54 


precise  ascertainment.  Probably  the  actual  Justification  of  a  tax  on  representa¬ 
tives,  which  has  no  equivalent  in  the  case  of  directly  owned  property,  wouid 
not  cover  a  tax  much  higher  than  that  imposed  in  New  York.  The  demand 
for  this  taxation  against  the  security  holder,  who  otherwise  would  not  pay 
taxes  in  the  community  in  which  he  lives,  is  pretty  insistent.  Expediency 
would  make  security  owners  welcome  a  higher  tax  than  principle  would  justify. 
It  may  be  that  people  will  sometime  come  to  the  conclusion  that  some  taxes 
ought  to  be  paid  in  the  community  of  residence  on  account  of  directly  owned 
property,  as  well  as  on  account  of  representatives.  Such  a  tax,  equal  to  the 
tax  on  intangibles,  would  even  matters  up. 

Let  us  bring  together  for  comparison  the  various  rates  computed  on  an  an¬ 
nual  basis  imposed  on  intangibles  in  the  several  endeavors  to  get  away  from 
the  general  property  tax: 


Connecticut : 

Optional  statute,  equivalent  to . 4  mills  annually 

Iowa  . . 5 

Maryland: 

3  mills  local  and,  say,  the  maximum  of  1.5  mills  state . 4.5 

Minnesota: 

Securities  i . 3  “ 

Mortgages  . . . 0.3  “  “ 

Michigan: 

Mortgage  securities  (based  on  a  25-year  bond),  say . 0.2 

Mortgages  (based  on  a  three-year  mortgage),  say . 1.66  “  “ 

New  York: 

•Securities  (based  on  a  25-year  bond),  say . 0.2  “ 

Mortgages  (based  on  a  three-year  mortgage),  say . 1.66  “ 

Pennsylvania  . 4 

Rhode  Island  . 4  “  " 

Wisconsin: 


(Capitalizing  the  income  tax  on  a  5  per  cent  basis).. 0.5  to  3  '* 

•May,  1915,  tax  rate  was  changed  from  50  cents  per  $100  for  the  life  of  the 
security  to  75  cents  for  a  five-year  period.  This  would  be  equivalent  to  1.5 
mills  annually. 

At  the  meeting  of  the  National  Tax  Association,  1914,  Mr.  William 
A.  Robinson,  of  Louisville,  Ky.,  explained  the  tax  reform  situation  in 
Kentucky.  It  appears  that  the  tax  system  of  Kentucky  was  based  upon 
the  general  property  tax  plan  similar  to  that  in  operation  in  all  of  the 
states  in  earlier  times.  An  effort  was  made  to  change  the  method  by 
minor  alterations  in  the  system  of  taxation,  but  these  were  found  to 
be  confusing  rather  than  effective  of  any  general  beneficial  results. 
Finally  it  was  decided  to  secure  a  change  in  the  Constitution  which 
would  permit  better  things  by  statute.  In  1912  the  legislature,  by  a 
large  majority  in  both  houses,  passed  an  act  submitting  to  the  vote  of 
the  people  an  amendment  permitting  the  legislature  to  make  neces¬ 
sary  changes.  The  people  voted  for  the  amendment,  but  the  courts 
decided  that  its  adoption  was  invalidated  by  reason  of  the  fact  that  the 
necessary  ninety  days*  notice  of  the  election,  at  which  it  was  voted  for, 
had  not  been  given.  The  legislature  of  1914,  by  a  large  majority  of 
both  houses,  ordered  resubmission  of  the  amendment,  November,  1915. 
In  his  address  before  the  National  Tax  Association,  Mr.  Robinson 
pointed  out  adverse  conditions  which  exist  in  Kentucky  which  he 
ascribed  to  a  bad  tax  system.  He  said : 

We  believe  that  it  is  clear  now  to  the  people  of  Kentucky  that  this 
general  property  tax  system  with  us,  as  always  and  everywhere,  has 
proved  a  failure,  illusive  and  delusive,  at  this  period  of  wider  interests 
and  broader  fields  of  development.  The  result  presents  evidence  clear 
and  unmistakable  in  Kentucky.  Please  note: 

Population. — Growth  in  last  decade  (U.  S.  Census),  6.6  per  cent,  as 
against  15  per  cent  the  previous  decade.  The  state  has  dropped  from 
her  rank  at  one  time  as  the  11th  to  the  14th — 40  of  the  120  counties  had 
an  actual  loss. 


55 


WHEN  YOU  HAVE  READ  THIS,  GIVE  IT  TO  A  FRIEND. 


Capital. — Utterly  Insufficient  for  progress,  about  sixty  million  dollars’ 
banking  capital. 

Factories. — Small  increase  only,  present  annual  production  about  200 
million  dollars,  nearly  half  in  one  county;  consequent  lack  of  employ¬ 
ment  profitable  for  holding  some  of  our  best  young  manhood;  for  illus¬ 
tration,  the  state  grows  one-third  of  all  tobacco  in  United  States,  yet  we 
are  third  in  manufacture. 

Agriculture. — One-third  of  area  (eight  million  acres)  unimproved  lands 
of  this  great  agricultural  state.  Because  of  restriction  to  growth  of  in¬ 
dustries  by  onerous  tax  thereon,  by  expelling  and  repelling  capital  work¬ 
ing  capital,  ^for  the  same  reason,  the  burden  of  taxation  fastens  itself 
more  and  more  on  the  farmer,  our  agricultural  property,  which  must  stay 
and  which  cannot  be  concealed.  It  is  bound  to  be  taxed. 

Intangible  Personalty. — Very  small  returns.  It  has  either  left  the  state 
or  avoids  the  assessor,  because,  practically,  the  tax  is  confiscatory  of  a 
large  proportion  of  income. 

In  concluding,  Mr.  Eobinson  said: 

The  final  summing  up  of  the  whole  matter  is  an  inadequate  revenue, 
only  about  seven  million  dollars  annually,  with  a  total  property  assess¬ 
ment  of  only  about  850  millions,  real  and  personal  property.  Our  Con¬ 
stitutional  Amendment  pending  authorizes  (not  mandatory) : 

First — The  classification  of  property  by  the  legislature — all  property 
of  the  same  class  to  pay  the  same  rate. 

Second — The  segregation  of  property  (when  the  proper  time  arrives), 
so  that  revenue  from  certain  kinds  may  be  set  apart  for  state  purposes 
— and  other  for  local  purposes — to  the  end  that  eventually  no  one  kind 
of  property  may  be  taxed  more  than  once,  when  now  all  is  taxed  at  least 
twice,  and  in  cities  at  least  thrice. 

Third — Public  Bonds — State,  county  or  city,  issued  for  schools  or  pub¬ 
lic  improvement,  as  not  to  be  taxed.  They  never  should  be.  Imagine  the 
United  States  government  taxing  its  own  bonds! 

When  this  amendment  is  adopted,  and  revenue  adjusted  thereunder, 
you  may  look  for  a  good  account  from  Kentucky. 

Note. — Amendment  adopted  by  the  voters  November  2,  1915. 

“Tax  Legislation  Enacted  and  Constitutional  Amendments  Pending 
During  1914 Mr.  M.  Markham  Flannery,  before  the  National  Tax 
Association,  1914,  discussed  the  subject  of  the  taxation  of  securities. 
The  following  is  from  his  address,  page  46  of  the  National  Tax  Asso¬ 
ciation’s  proceedings  of  1914: 

Securities:  Low  Uniform  Rate. — The  taxation  of  securities  has  re¬ 
ceived  much  consideration  during  the  present  year  in  Maryland,  New 
York  and  Massachusetts. 

The  Maryland  law  which  provided  for  the  taxation  of  corporate  credits 
and  dividend-paying  shares  of  foreign  corporations  at  a  fixed  local  rate  of 
30  cents,  plus  the  annual  state  rate  applicable  to  property  in  general, 
•  was  this  year  amended  so  that  the  entire  rate  cannot  now  exceed  45 
cents.  ’  In  1896,  when  this  system  was  first  adopted  in  Maryland,  the 
constitutionality  of  levying  a  fixed  rate  for  state  purposes  was  seriously 
questioned,  but  subsequently  judicial  interpretation  justified  the  levying  of 
a  fixed  rate  in  lieu  of  the  regular  state  rate,  which  rate  since  1896  has 
increased  from  less  than  18  cents  to  31  cents.  In  addition  to  the  ele¬ 
ment  of  uncertainty,  it  is  plain  that  the  aggregate  rate,  61  cents  in  1914, 
with  prospects  of  increasing  in  future  years,  was  too  high  to  obtain  the 
best  results.  Another  weighty  consideration,  with  respect  to  this  change, 
was  the  method  of  treating  intangibles  in  the  jurisdictions  immediately 
surrounding  Maryland.  Thus  in  both  the  District  of  Columbia  and  in 
Delaware  such  securities  are  entirely  exempt  from  taxation.  In  Penn- 


56 


sylvania  they  are  taxed  at  a  uniform  rate  of  40  cents,  and  in  Virginia  a 
rate  of  20  cents  was  this  year  applied  on  bank  deposits,  and  there  are 
indications  that  Virginia  may  extend  the  classification  method  to  other 
classes  of  property.  In  Maryland,  county,  town  and  city  obligations 
have  also  this  year  been  exempted  from  all  taxation.  [Note. — Rate 
changed  in  1915.  See  Maryland  in  “Classification  in  Other  States.”] 

Secured  Debts  Tax. — An  act  similar  in  some  respects  to  the  secured 
debts  tax  law  in  New  York  was  passed  in  Massachusetts. 

The  Massachusetts  act  provides  for  the  registration  of  bonds  secured 
by  tangible  property  within  or  without  the  state,  provided  such  property 
was  actually  taxed  during  the  preceding  year.  Upon  the  payment  of  a 
fee  of  30  cents  for  each  $100  face  value,  such  bonds  are  certified  as  tax- 
free  for  a  period  of  one  year.  One-half  of  the  revenue  from  this  source 
is  for  state  and  the  other  half  for  local  purposes. 

In  its  administrative  and  optional  features  it  resembles  the  New  York 
law,  but  it  is  essentially  different  in  other  important  particulars.  Thus, 
unlike  the  New  York  law,  it  is  limited  to  a  specific  kind  of  secured 
debts,  while  the  New  York  law  applies  to  secured  and  certain  kinds  of 
unsecured  debts.  In  effect  it  resembles  an  annual  flat  tax  rate  rather 
than  a  commutation  of  taxes  secured  by  the  payment  of  a  nominal  fee, 
because  registration  in  Massachusetts  must  be  renewed  and  the  fee  must 
be  paid  each  year  in  order  to  secure  annual  exemption  of  the  bonds. 

The  Massachusetts  law,  however,  may  be  repugnant  to  the  State  Con¬ 
stitution,  which  requires  that  all  property  shall  be  proportionately  taxed, 
while  the  New  York  law  is  not  endangered  by  constitutional  restrictions. 
[Note. — See  recent  changes  in  “Classification  in  Other  States.”] 

The  question  of  repealing  or  amending  the  New  York  secured-debts 
law  was  given  much  consideration  during  the  last  legislative  session. 
Bills  for  both  purposes  were  introduced,  but  failed  of  passage.  Among  the 
amendments  proposed  was  one  intended  to  substitute  an  annual  rate 
for  the  registration  fee,  which,  when  paid  once,  exempted  securities  for¬ 
ever.  [See  note  Hastings  Lyons’  paper  preceding.] 

Mortgage-Recording  Tax. — A  bill  intended  to  change  some  features  of 
New  York’s  mortgage-recording  law  was  introduced  at  the  instance  of 
the  State  Board  of  Tax  Commissioners,  the  apparent  intention  being  to 
clarify  the  original  law,  which 'has  proven  very  difficult  of  administration, 
and  to  secure  some  method  d>f  apportionment  of  taxes  between  taxing 
districts,  especially  with  respect  to  mortgages  which  were  affected  by 
prior  incumbrances.  It  also  provided  for  recording  mortgages  covering 
property  located  both  within  and  without  the  state,  with  an  optional 
clause  to  permit  the  payment  of  the  fee  upon  the  entire  amount  of  such 
mortgage.  This,  in  effect,  was  perhaps  an  extension  of  the  secured-debts 
law  theory,  and  was  evidently  so  understood  by  the  Governor,  who,  in  his 
veto  message,  expressed  opposition  to  the  bill  on  the  ground  that  the 
proceeds  would  necessarily  have  to  be  apportioned  to  the  localities, 
whereas,  his  desire  was  to  safeguard  the  revenue  of  the  state. 

Hon.  Eben  H.  Wolcott,  tax  commissioner  of  Indiana,  in  an  address 
before  the  ninth  annual  conference  of  the  National  Tax  Association, 
San  Francisco,  Cal.,  Aug.  13,  1915,  said: 

The  almost  universal  condemnation  of  the  general  property  tax  is  due  > 
to  the  fact  that  it  cannot  be  successfully  applied,  being  a  uniform  and  i 
equal  tax  upon  all  property  alike  without  regard  to  “ability  to  pay”  or  r 
“benefits  derived.”  Being  familiar  with  the  conditions  in  Indiana,  my  J 
own  state,  and  believing  that  I  can  properly  conclude  that  any  state 
laboring  under  the  same  laws  relating  to  taxation  as  our  own  is  sim¬ 
ilarly  affected,  I  shall  use  some  local  illustrations.  In  1851  the  Constitu¬ 
tion  of  Indiana  was  amended  and  that  part  relating  to  taxation  reads  as 
follows: 

“The  General  Assembly  shall  provide  by  law  for  a  uniform  and  equal 
rate  of  assessment  and  taxation,  and  shall  prescribe  such  regulations  as 

57 


shall  secure  a  just  valuation  for  taxation  of  all  property,  both  real  and 
personal,  excepting  such  only  for  municipal,  educational,  literary,  sci¬ 
entific,  religious  or  charitable  purposes  as  may  be  especially  exempted 
by  law.” 

This  is  the  basis  of  the  system  known  as  the  general  property  tax. 
For  many  years  it  seemed  satisfactory  owing  to  the  visible  forms  of 
property  in  existence  and  the  small  needs  and  moderate  demands  of 
the  state  and  local  communities  upon  the  public  purse.  But  the  im¬ 
perfect  enforcement  of  the  law  even  as  it  was  by  local  taxing  officers, 
and  loss  of  needed  revenues,  as  the  years  advanced  and  the  state  de¬ 
veloped,  caused  the  passage  of  a  law  creating  the  State  Tax  Commis¬ 
sion  and  the  County  Assessor  in  1891,  and  a  clearly  defined  method  of 
taxation  whereby  all  property,  both  real  and  personal,  was  to  be  assessed 
at  its  true  cash  value.  This  has  never  been  done;  in  fact,  it  has  never 
been  possible,  with  the  machinery  at  the  disposal  of  the  taxing  officers, 
to  secure  the  information  necessary  to  accomplish  this  result.  At  the 
time  of  the  passage  of  this  law  we  pointed  with  pride  to  our  taxing  sys¬ 
tem  as  one  of  the  best  and  most  perfect  then  devised,  but  such  a  system 
to-day,  under  changed  conditions,  is  hopelessly  inefficient  and  impossible 
to  enforce.  Still  many  states  like  our  own  Indiana  are  laboring  under 
the  same  law.  To  get  an  expression,  I  wrote  to  the  taxing  officers  of 
each  state  asking  the  following  questions: 

“First — Do  you  have  general  property  tax? 

“Second — If  you  have  classification  tax,  please  give  classes,  etc.  Is  the 
method  satisfactory? 

“Third — What  improvements  would  you  suggest,  or  what  changes  in 
your  present  method  of  assessment  and  taxation.” 

Considering  the  replies  received,  it  is  really  astonishing  to  note  the  cha¬ 
otic- condition  of  the  taxing  laws  in  many  states;  and  the  total  lack  of 
uniformity  between  the  different  states  is  a  question  for  deep  considera¬ 
tion.  Every  state  that  is  now  laboring  under  the  general  property  tax 
law  replied  favoring  a  classification  tax  on  intangibles  except  Ohio,  which, 
with  a  general  property  tax,  having  a  low  limited  rate,  seems  satisfied, 
though  acknowledging  difficulty  in  taxing  intangibles.  Ten  states  last 
year  had  constitutional  amendments  pending  for  the  purpose  of  securing 
a  classification  tax.  Indiana  was  one  of  these,  and  the  amendment,  with 
many  others,  was  defeated.  This  result  was  not  due  to  the  fact  that  our 
people  were  satisfied  with  the  present  law,  but  because  they  had  not 
been  educated  to  the  necessity  for  such  an  amendment. 


State  Senator  C.  C.  Pervier’s  [Illinois]  views  on  some  of  the  phases 
of  Illinois  taxation  are  set  forth  in  the  answer  he  makes  in  the  Farm¬ 
ers’  Review  to  an  inquiry  from  a  down-state  reader.  The  whole  tax 
situation  in  Illinois  is  so  confusing  that  injustice  and  inequity  are 
almost  inevitable,  and  Senator  Pervier  recognizes  this  in  his  discussion. 
The  question  asked  by  the  subscriber  was  referred  to  Senator  Pervier 
by  the  Review  because  he  is  one  of  the  associate  editors  of  that  pub¬ 
lication. 

Here  is  the  question,  and  the  Senator’s  reply : 

Question:  Do  both  the  owner  and  the  mortgagee  of  real  estate  have 
to  pay  taxes  on  the  property  in  Illinois?  My  assessor  seems  to  think 
he  can  assess  the  man  who  holds  the  mortgage  and  the  land  the  mort¬ 
gage  is  given  on. — W.  A.  L*.,  Pulaski  Co.,  Ill. 

Answer:  Under  the  laws  of  Illinois,  the  owner  of  mortgaged  property 
can  be  assessed  for  the  full  taxable  value  of  that  or  that  property  and 
the  mortgage  holder  may  also  be  assessed  for  the  full  value  of  his  mort¬ 
gage.  This  is  an  unjust  law  and  particularly  so  to  the  owner  of  the 


58 


property,  who  is  compelled  to  pay  taxes  not  only  upon  his  equity  therein, 
but  also  upon  what  he  owes  the  mortgage  holder.  There  can  he  no 
greater  injustice  in  a  tax  law  than  that  requiring  the  payment  of  taxes 
upon  indebtedness. 

On  the  other  hand,  where  the  mortgagee  is  assessed  for  the  value  of 
the  mortgage,  a  double  tax  is  created  to  that  extent  and  is  no  less 
than  robbery  on  the  part  of  the  state.  To  illustrate,  we  will  assume 
that  I  have  $5,000  in  cash  and  that  is  all  the  property  that  I  possess. 

I  buy  a  house  and  lot  for  $10,000  and  pay  $5,000  down  and  give  a  mort¬ 
gage  for  $5,000.  I  am  taxed  for  the  full  assessable  value  of  that  property 
just  the  same  as  if  I  had  paid  $10,000  cash  for  it.  The  mortgagee  may 
also  be  assessed  for  $5,000,  the  value  of  his  mortgage,  thus  making 
$15, '000  listed  for  taxation  when  there  is  but  $10,000  worth  of  property. 
Yet  this  is  the  tax  condition  in  Illinois,  and  the  result  is  that  most  of  the 
mortgages  escape  taxation  entirely  and  the  whole  burden  falls  upon  the 
encumbered  property. 

An  amendment  to  the  Constitution  will  be  submitted  to  the  voters  of 
this  state  at  the  next  general  election,  permitting  the  classification  of 
property  for  taxation  purposes  and  if  adopted  by  the  people  the  next 
legislature  may  remedy  this  condition.  C.  C.  PERVIER,  Bureau  Co.,  Ill. 


HEAVY  ADVISORY  VOTE  FAVORED  AMENDMENT 

On  Nov.  5,  1912,  the  following  question  was  submitted  to  the  voters 
of  Illinois  under  the  Public  Policy  Act: 

“Shall  the  next  General  Assembly  (in  order  that  the  people  may  be  re¬ 
lieved  of  a  system  of  taxation  which  places  a  comparatively  heavier  bur¬ 
den  upon  the  poor  man  than  upon  his  wealthier  neighbor,  which  is  un¬ 
just  to  all  who  fall  under  the  full  force  of  its  operation,  and  which 
places  a  premium  upon  dishonesty)  submit  to  the  voters  of  the  State  of 
Illinois  at  the  next  following  state  election,  an  amendment  to  the  State 
Constitution  providing  for  the  classification  of  property  for  purposes  of 
taxation,  with  taxes  uniform  as  to  each  class  within  the  jurisdiction 
levying  the  same?” 

The  vote  upon  this  question  was  as  follows:  Yes,  541,189.  No, 
187,467. 

This  was  the  largest  affirmative  advisory  vote  ever  cast  in  Illinois, 
except  that  for  direct  primaries,  in  1904. 

The  question  purposely  was  broadly  stated  in  order  to  evoke  a 
popular  expression  as  to  the  principle  of  classification,  leaving  to  the 
General  Assembly  discretion  in  appropriately  expressing  this  principle 
in  the  Constitutional  amendment  which  it  might  submit,  but  the  edu¬ 
cational  campaign  was  conducted  on  the  basis  of  the  Proposed 
Amendment  prepared  by  the  Illinois  Special  Tax  Commission,  and  this 
amendment,  verbatim,  has  been  submitted  by  the  General  Assembly. 


LARGE  VOTE  IN  THE  GENERAL  ASSEMBLY 

More  than  the  required  two-thirds  vote  of  all  the  members  elected  to 
both  houses  was  given  the  pending  amendment.  Thirty-five  out  of 
fifty-one  Senators,  and  130  out  of  the  153  Representatives,  voted  for 
the  amendment,  as  follows : 


59 


BE  SURE  TO  VOTE  “YES.”  FAILURE  TO  DO  SO  IS  A  VOTE  FOR  PRESENT  EVI LS. 


SENATORS 


Name. 

Address. 

Business. 

Paul  W.  Abt 

East  St.  Louis 

Banker 

Henry  Andrus 

Rockford 

Farmer 

Henry  W.  Austin 

Oak  Park 

Banker 

Martin  B.  Bailey 

Danville 

Lawyer 

Percival  G.  Baldwin 

Chicago 

Real  Estate 

J.  G.  Bardill 

Highland 

Banker  and  Merchant 

John  J.  Boehm 

Chicago 

Druggist 

John  Broderick 

Chicago 

Merchant 

F.  C.  Campbell 

Xenia 

Physician 

Patrick  J.  Carroll 

Chicago 

Accountant 

Adam  C.  Cliffe 

Sycamore 

Lawyer 

William  A.  Compton 

Macomb 

Lawyer 

Willett  H.  Cornwell 

Chicago 

Lawyer 

Edward  C.  Curtis 

Grant  Park 

Banker 

John  Dailey 

Peoria 

Lawyer 

John  T.  Denvir 

Chicago 

Real  Estate  and  Builder 

Samuel  A.  Ettelson 

Chicago 

Lawyer 

N.  Elmo  Franklin 

Lexington 

Live  Stock  and  Farmer 

Eklward  J.  Glackin 

Chicago 

Accountant 

A1  F.  Gorman 

Chicago 

Architect 

John  R.  Hamilton 

Mattoon 

Merchant 

George  W.  Harris 

Chicago 

Proof  Reader 

Daniel  Herlihy 

Chicago 

Engineer 

Edward  J.  Hughes 

Chicago 

Contractor 

Morton  D.  Hull 

Chicago 

Lawyer 

Francis  A.  Hurley 

Chicago 

Real  Estate 

W.  S.  Jewell 

Lewistown 

Lawyer 

Frank  A.  Landee 

Moline 

Merchant 

Sam  W.  Latham 

Eldorado 

Physician 

Raymond  D.  Meeker 

Sullivan 

Lawyer 

Albert  J.  Olson 

Woodstock 

Farmer  and  Stock  Dealer 

Clayton  C.  Pervier 

Sheffield 

Farmer 

Frederick  B.  Roos 

Forest  Park 

Lawyer  and  Banker 

Patrick  J.  Sullivan 

Chicago 

Merchant 

John  A.  Swanson 

Chicago 

Lawyer 

[NOTE. — Senator  Richard  J.  Barr,  Joliet,  was  called  home  early  in  the  day 
on  account  of  a  death  in  his  family.  He  asked  to  be  recorded  “aye,”  but  as 
the  resolution  was  not  voted  upon  until  late  in  the  evening  his  request  was  not 
allowed.] 


REPRESENTATIVES 


Name. 

Address. 

Business. 

John  A.  Atwood 

Stillman  Valley 

Retired 

Elwood  Barker 

McLeansboro 

Salesman 

William  H.  Basel 

Astoria 

Implement  Dealer 

Ole  E.  Benson 

Ottawa 

Sand  Dealer 

Wm.  H.  Bentley 

Pontiac 

Retired  Farmer 

Frederick  J.  Bippus 

Chicago 

Real  Estate 

Randolph  Boyd 

Galva 

Manufacturer  retired 

Thomas  H.  Boyer 

Chicago 

Packing  House  Products 

F.  A.  Brewer 

Tampico 

Farmer 

William  M.  Brown 

Chicago 

Merchant 

George  R.  Bruce 

Chicago 

Supt.  Ins.  Dept.  K.  P. 

John  S.  Burns 

Chicago 

Clerk  Elec.  Com. 

William  J.  Butler 

Springfield 

Lawyer 

T.  C.  Buxton 

Decatur 

Physician  and  J.  P. 

Thomas  Campbell 4 

Rock  Island 

Farmer 

Bernard  J.  Conlon 

Chicago 

Clerk  Co.  Office 

Thomas  Curran 

Chicago 

Manufacturer 

Charles  C'urren 

Mound  City 

Real  Estate  and  Ins. 

Gotthard  A.  Dahlberg 

Chicago 

Lawyer 

Frank  R.  Dalton 

Aurora 

Coal  Dealer 

James  E.  Davis 

Galesburg 

Lawyer 

John  T.  Desmond 

East  St.  Louis 

Clerk  R.  R.  Office 

Thomas  P.  Devereux 

Chicago 

Manufacturer 

John  P.  Devine 

Dixon 

Lawyer 

Frederic  R.  DeYoung 

Harvey 

Lawyer 

Daniel  D.  Donahue 

Bloomington 

Lawyer 

James  M.  Donlan 

Chicago 

Merchant 

DeGoy  B.  Ellis 

Elgin 

Lawyer 

Jacob  W.  Epstein 

Chicago 

Clerk 

Michael  Fahy 

Toluca 

Barber 

James  H.  Farrell 

Chicago 

Real  Estate 

Norman  G.  Flagg 

Moro 

Farmer 

A.  M.  Foster 

Rushville 

Farmer 

E.  I.  Frankhauser 

Chicago 

Lawyer 

John  J.  Gardner 

Chicago 

Clerk  Municipal  Court 

Ferdinand  A.  Garesche 

Madison 

Lawyer 

60 


Thomas  N.  Gorman 

Peoria 

Clerk 

Thomas  E.  Graham 

Ingleside 

Real  Estate 

William  J.  Graham 

Aledo 

Lawyer 

Carl  Green 

Robinson 

Lawyer 

E.  Walter  Green 

Hindsboro 

Farmer 

Charles  A.  Gregory 

Lovington 

Farm  Manager 

John  Griffin 

Chicago 

Teaming 

William  M.  Groves 

Petersburg 

Banker 

Harry  F.  Hamlin 

Chicago 

Lawyer 

James  C.  Harvey 

Bloomington 

Insurance 

John  H.  Helwig 

Chicago 

Real  Estate 

Michael  F.  Hennebry 

Wilmington 

Lawyer 

H.  S.  Hicks 

Rockford 

Lawyer 

Geo.  C.  Hilton 

Chicago 

Bailiff 

William  H.  Hoffman 

Quincy 

Publisher 

William  P.  Holaday 

Georgetown 

Lawyer 

Joseph  O.  Hruby 

Chicago 

Real  Estate 

William  A.  Hubbard 

Carrollton 

Real  Estate 

John  Huston 

Blandinsville 

Banker 

Michael  L.  Igoe 

Chicago 

Lawyer 

Robt.  R.  Jackson 

Chicago 

Publisher 

John  G.  Jacobson 

Chicago 

Clerk  Treas.  Office 

Harold  C.  Kessinger 

Aurora 

Lecturer 

Hubert  Kilens 

Chicago 

Optician 

Simon  E.  Lantz 

Congerville 

Farmer 

William  L.  Leech 

Amboy 

Lawyer 

Stephen  T.  LePage 

East  St.  Louis 

Real  Estate  and  Loans 

Geo.  U.  Lipshulch 

Chicago 

Surgeon 

John  H.  Lyle 

Chicago 

Lawyer 

John  F.  Lynch 

Chillicothe 

Hardware 

Thomas  E.  Lyon 

Springfield 

Lawyer 

William  C.  Maucker 

Rock  Island 

Insurance  Agent 

William  R.  McCabe 

Lockport 

Publisher 

James  C.  McGloon 

Chicago 

Clerk 

Richard  R.  Meents 

Ashkum 

Banker 

Edward  L.  Merritt 

Springfield 

Journalist 

Benjamin  M.  Mitchell 

Chicago 

Manufacturer 

John  Robert  Moore 

Kewanee 

Lawyer 

Frank  W.  Morrasy 

Sheffield 

Farmer 

Robert  J.  Mulcahy 

Chicago 

Clerk 

Hawkins  O.  Murphy 

Pinckneyville 

Banker 

Daniel  O'Connell 

Kinsman 

Lumber 

J.  J.  O’Rourke 

Harvey 

Real  Estate 

James  M.  Pace 

Macomb 

Hotel . 

Edwin  C.  Perkins 

Lincoln 

Lawyer 

Louis  J.  Pierson 

Wilmette 

Lawyer 

Joseph  Placek 

Chicago 

Restaurant 

James  T.  Prendergast 

Chicago 

Deputy  Sheriff 

Walter  M.  Provine 

Taylorville 

Lawyer 

C.  A.  Purdunn 

Marshall 

Druggist 

Clifford  Quisenberry 

Lincoln 

Farmer 

G.  A.  Ray 

Rossville 

Lawyer 

James  W.  Rentchler 

Belleville 

Real  Estate 

Chris  Rethmeier 

Edwardsville 

Farmer 

John  C.  Richardson 

Edinburg 

Farmer 

Walter  E.  Rinehart 

Effingham 

Lawyer 

Solomon  P.  Roderick 

Chicago 

Lawyer 

Arthur  Roe 

Vandalia 

Lawyer 

Albert  Rostenkowski 

Chicago 

Merchant 

Isaac  S.  Rothschild 

Chicago 

Lawyer 

Wm.  Rowe 

Saybrook 

Farmer 

Frank  Ryan 

Chicago 

Grain  and  Commission 

Frank  J.  Ryan 

Chicago 

Clerk 

James  W.  Ryan 

Chicago 

Clerk  Cook  County 

Edward  M.  Santry 

Chicago 

Clerk  Circuit  Court 

William  M.  Scanlan 

Peru 

Lawyer 

Robert  Scholes 

Peoria 

Lawyer 

Henry  F.  Schuberth 

Chicago 

Real  Estate 

Frank  J.  Seif,  Jr. 

Chicago 

Clerk  Municipal  Court 

David  E.  Shanahan 

Chicago 

Real  Estate 

Edward  D.  Shurtlefif 

Marengo 

Lawyer 

Edward  J.  Smejkal 

Chicago 

Lawyer 

Peter  F.  Smith 

Chicago 

Broker 

Abraham  L.  Stanfield 

Paris 

Grain  Dealer 

C.  A.  Stewart 

West  Frankfort 

Farmer 

John  W.  Thomason 

Louisville 

Lawyer 

William  G.  Thon 

Chicago 

Lawyer 

Homer  J.  Tice 

Greenview 

Farmer 

Squire  F.  Tompkins 

Joliet 

Traveling  Salesman 

Joseph  A.  Trandel 

Chicago 

Merchant 

John  D.  Turnbaugh 

Mount  Carroll 

Lawyer 

Oral  P.  Tuttle 

Harrisburg 

Lawyer 

61 


PASS  THIS  COPY  ALONG,  AND  WRITE  FOR  ANOTHER  ONE. 


James  H.  Vickers 
Charles  W.  Vursell 
John  P.  Walsh 
James  A.  Watson 
Joseph  A.  Weber 
Owen  B.  West 
Francis  E.  Williamson 
George  H.  Wilson 
Harry  Wilson 
Robert  E.  Wilson 
Chas.  L.  Wood 
C.  A.  Young 


Harvard 

Salem 

Chicago 

Elizabethtown 

Chicago 

Yates  City 

Urbana 

Quincy 

Pinckneyville 

Chicago 

Keenes 

Chicago 


Real  Estate 

Mei  chant 

Merchant 

Lawyer 

Lawyer 

Farmer 

Lawyer 

Lawyer 

School  Teacher 
Real  Estate 
Farmer 
Dentist 


ENDORSEMENTS  BY  ORGANIZATIONS 


As  the  educational  movement  for  the  submission  and  final  adoption 
of  the  pending  amendment  has  progressed,  it  has  had  the  support  of 
many  organizations  throughout  Illinois,  among  them  the  following: 


Chicago  Real  Estate  Board. 

Cook  County  Real  Estate  Board. 

Illinois  Farmers’  Institute. 

Illinois  Commercial  Federation. 

Springfield  Chamber  of  Commerce. 

Peoria  Chamber  of  Commerce. 

Rockford  Real  Estate  Board. 

Chicago  Association  of  Commerce. 

Chicago  Board  of  Trade. 

Illinois  Bankers’  Association. 

Commercial  Club  of  Chicago. 

Industrial  Club  of  Chicago. 

Citizens’  Association,  Chicago. 

Illinois’  Taxpayers’  Alliance. 

Civic  Conference' of  Cook  Co.,  convened  by  the 
Chicago  Real  Estate. Board. 

Hamilton  Club,  Chicago. 

Iroquois  Club,  Chicago. 

Illinois  Livestock  Breeders’  Association. 
Farmers’  Grain  Dealers’  Association  of  Illinois. 


PRESS  EXPRESSIONS  OF  APPROVAL 

While  the  campaign  of  education  for  the  adoption  of  the.  Proposed 
Amendment  has  only  begun,  many  newspapers  have  published  expres¬ 
sions  reflecting  favorable  public  sentiment  and  urging  all  to  vote  for 
the  amendment.  The  following  editorial  comments  upon  the  Amend¬ 
ment  show  the  attitude  of  the  press: 

ABILITY  TO  PAY  OR  INABILITY  TO  ESCAPE? 

[Quincy  Journal.] 

We  have  to  pay  taxes  how  In  proportion,  to  our  inability  to  escape  them.  If 
our  property  is  easy  to  see  and  easy  to  find,  we  pay.  If  it  isn’t  easy  to  see 
or  easy  to  find — well,  what  we  pay  is  a  question  not  of  ability,  but  of  conscience. 

And  the  way  of  the  conscientious  is  made  hard  by  knowledge,  based  on  most 
ample  experience,  that  the  more  honest  they  are  the  worse  they  are  going  to 
fare. 

TAX  REFORM  IN  SIGHT 

[The  Prairie  Farmer.] 

A  noteworthy  measure  passed  by  the  legislature  is  the  Tax  Amendment  reso¬ 
lution.  The  Amendment  will  now  go  before  the  voters  at  the  next  general  el<  c- 


62 


tion  in  the  fall  <of  1916,  and  if  carried,  will  enable  the  legislature  of  1917  to  cor¬ 
rect  some  of  the  many  abuses  in  our  taxing  system.  The  one  of  most  direct 
interest  to  farmers,  of  course,  is  the  double  taxation  of  mortgaged  land,  but 
there  are  also,  many  others  that  should  be  eliminated. 

THE  TAX  AMENDMENT 

[Paris,  Ill.,  Beacon.] 

After  long  years  of  effort,  the  General  Assembly  of  Illinois  has  submitted  to 
a  vote  of  the  people  the  tax  amendment  to  the  state  constitution,  designed  to 
give  to  the  legislature  the  necessary  power  to  revise  the  personal  property 
tax  laws  of  the  state  upon  a  modern,  just  and  workable  basis.  The  approval 
1  of  a  majority  of  the  male  vote  of  the  state  cast  at  the  general  election  of  1916 
will  be  necessary  to  make  this  Amendment  a  part  of  our  Constitution. 

NOW  FOR  A  REVENUE  CAMPAIGN 

[Chicago  Tribune.] 

Common  sense  has  prevailed  in  the  Illinois  house,  and  the  joint  resolution 
submitting  an  amendment  to  the  revenue  article  of  the  Constitution  has  been 
approved — decisively  approved.  *  *  * 

Give  the  voters  the  facts,  the  truth,  and  they  will  vote  emphatically  to 
abolish  the  impossible  general  property  tax  and  make  justice  and  honesty 
something  other  than  policies  punishable  by  legal  robbery  and  ruthless  con¬ 
fiscation  of  income. 

ABILITY  TO  PAY,  OR  INABILITY  TO  ESCAPE? 

[East  St.  Louis  Sun.] 

Senator  Compton,  introducer  of  the  resolution  to  submit  a  tax  reform  con¬ 
stitutional  amendment,  gives  a  neat  condition  of  the  present  system  of  assess¬ 
ing  personal  property. 

He  characterizes  the  effect  of  the  Proposed  Amendment  as  giving  the  Gen¬ 
eral  Assembly  power  to  classify  personal  property  “so  that  each  class  shall  be 
assessed  in  proportion  to  its  ability  to  pay  instead  of  in  proportion  to  its  in¬ 
ability  to  escape."  *  *  * 

TAX  REFORM  IN  SIGHT  AFTER  YEARS  OF  TROUBLE 

[Chicago  Examiner.] 

The  passing  of  the  Constitutional  Amendment  that  makes  it  possible  to  re¬ 
form  the  archaic  and  unfair  taxing  system  of  Illinois  is  the  high  spot  in  this 
year’s  legislation.  *  *  * 

The  whole  country  has  been  devoting  itself  to  studying  the  problems  of 
state  revenue;  the  data  are  all  available  and  there  can  be  no  excuse  for  a 
failure  to  give  Illinois  the  very  best  system  pointed  out  by  the  experience  and 
research  of  our  sister  states. 

THE  TAX  REFORM 

[Rockford  Star.] 

The  article  by'  William  Andrews,  member  of  the  Board  of  Review,  in  The 
Sunday  Star,  on  the  necessity  for  placing  bonds  and  mortgages  on  the  same 
basis  as  real  estate  strikes  hofne.  The  unfairness  of  the  present  system  is 
manifest.  Only  a  small  portion  of  the  mortgages  are  taxed  at  all.  And  the 
disposition  to  escape  taxation  has  been  mainly  due  to  what  is  considered  an 
unjust  tax  on  mortgages.  It  is  interesting  to  note  that  in  New  York,  Mary¬ 
land  and  Kentucky,  where  tax  reforms  were  voted  upon  at  the  election  this 
month,  that  nearly  all  the  amendments  carried. 

TAX  SYSTEM  ANTIQUATED 

[Quincy  Whig.] 

Fresh  evidence  of  the  antiquated  tax  system  under  which  the  State  of  Illinois 
is  laboring  is  at  hand  almost  every  day.  To  remedy  defects  an  agitation  has 
been  in  progress  throughout  the  state,  culminating  in  the  passing  of  a  referen¬ 
dum  act  by  the  legislature  which  gives  the  people  of  the  state  the  right  to  vote 
on  a  Constitutional  Amendment  in  November,  1916.  If  carried,  this  Amendment 
will  give  the  legislature  power  to  pass  special  laws  dealing  with  the  tax 
subject.  *  *  * 

The  Whig  believes  that  there  should  be  some  method  much  more  simple  and 
l  equitable  in  tax  matters. 

# 

PROGRESS  OF  TAX  REFORM 

[Chicago  Daily  News.] 

Maryland  has  joined  the  states  that  permit  the  classification  of  property  for 
purposes  of  taxation.  This  is  a  mark  of  intelligent  progress  in  the  little  under - 
r  stood  science  of  levying  taxes  with  reason  and  justice. 

At  the  election  of  November  2  Maryland’s  voters  adopted  an  amendment  to 
the  constitution  on  the  subject  of  taxation. 

The  scope  of  this  amendment,  it  will  be  seen,  is  somewhat  broader  than 
that  on  which  the  people  of  Illinois  are  to  vote  at’  the  fall  election  next  year, 
since,  for  purposes  of  taxation,  it  provides  for  the  classification  of  improve- 


63 


IT  TAKES  A  MAJORITY  OF  ALL  WHO  VOTE  IN  NOVEMBER  TO  ADOPT  THE  AMENDMENT. 


ments  upon  land,  as  well  as  for  the  classification  of  personal  property.  The 
change  sought  by  the  pending  Illinois  Amendment  is,  however,  all  things  con¬ 
sidered,  the  most  important  feature  of  the  revenue  question. 

Illinois  should  follow  the  lead  of  other  progressive  commonwealths  that  are 
abandoning  the  policy  of  uniformity  in  the  taxation  of  all  kinds  of  property, 
including  mere  tokens  of  indebtedness.  This  policy  nowhere  has  been  made  to 
work  with  even  an  approximate  degree  of  success  or  justice.  Illinois,  like  other  ' 
states  intelligently  advised,  should  permit  classification,  with  different  tax  rates 
for  different  classes  of  property. 

URGENT  NECESSITY  FOR  TAX  REFORM 

[Gibson  City  Courier.] 

•  *  •  As  we  understand  it,  the  Proposed  Amendment  merely  gives  the 

General  Assembly  the  power  to  correct  such  incongruities  and  injustices  as 
the  double  taxation  and  to  arrange  a  tax  system  that  shall  be  fair  to  every¬ 
body. 

The  present  system  seems  to  be  generally  unsatisfactory,  except  to  those 
interests  which  do  not  desire  to  bear  their  just  proportion  of  public  expenses. 

It  does  not  give  the  state  the  revenue  it  is  entitled  to  and  it  puts  a  premium 
on  dishonesty,  distributing  the  tax  burden  unfairly,  the  greater  weight  being 
imposed  on  the  most  conscientious.  *  *  * 

NOW  ADOPT  IT 

[Springfield  News-Record.] 

The  legislature  did  its  duty  in  passing  the  resolution  submitting  to  the  peo¬ 
ple  the  Proposed  Amendment  of  the  revenue  section  of  the  Constitution.  Now 
it  is  up  to  the  voters.  Since  the  section  upon  which  the  present  taxing  laws 
are  based  was  framed,  conditions  have  changed.  Property  values  are  different. 

The  present  system  overburdens  lands  and  other  visible  property.  It  permits 
Intangible  property  to  escape.  It  practically  compels  taxdodging  by  confisca¬ 
tion  of  the  earnings  of  certain  holdings.  It  has  driven  capital  from  the  state. 
The  adoption  of  the  Amendment  at  the  November  election  in  1916  will  simply 
£ive  the  legislature  power  to  adjust  tax  laws  to  existing  conditions. 

THE  TAX  AMENDMENT 

[East  St.  Louis  Tribune.] 

The  Civic  Federation  of  Chicago  is  on  the  job  again  getting  its  campaign 
under  way  for  the  tax  amendment  which  will  be  submitted  to  Illinois  voters 
in  November,  1916.  *  *  *  The  proposition  *  •  *  is  a  meritorious  one  and 

should  receive  careful  consideration  by  the  voters. 

It  is  not  the  adoption  of  any  theory,  but  a  recommendation  giving  the  legis¬ 
lature  power  to  study  the  question  from  all  angles.  The  adoption  of  a  specific 
report  will  come  after  more  discussion  in  civic  leagues,  conventions,  the  press, 
and  on  the  platform.  No  suggestion  of  differences  of  opinion  on  what  the  cor¬ 
rect  system  is  should  interfere  with  the  expression  in  November,  1916. 

PROPOSE  TAX  REFORMS 

[Jacksonville  Journal.] 

At  the  general  election  in  November,  1916,  the  people  of  Illinois  will  vote 
upon  the  question  of  tax  reform.  Advocates  of  the  Proposed  Amendment  de¬ 
sire  to  abolish  the  general  property  tax  and  establish  classified  principles  in 
taxation,  with  large  powers  vested  in  the  legislature  for  the  enactment  of  laws 
to  govern  it.  In  four  other  states  within  the  past  year  tax  reform  measures 
have  been  voted  upon  with  satisfactory -results.  There  is  justice  in  the  com¬ 
plaint  often  heard  that  the  bulk  of  taxes  raised  comes  from  visible  property. 

*  •  *  The  ideal  system  is  not  going  to  come  at  once,  for  the  right  system 
must  be  an  evolution  and  it  will  take  several  years  to  work  it  out  satisfac¬ 
torily.  *  •  • 

TAX  AMENDMENT  ACTION 

[Edwardsville  Intelligencer.] 

Final  returns  from  the  November  2  election  in  those  states  which  voted  upon 
tax  amendments  similar  in  character  to  that  which  will  be  voted  upon  i"  Illi¬ 
nois,  November  7,  1916,  indicate  that  in  each  case  the  amendment  was  adopted 
by  the  people.  *  *  * 

Friends  of  the  pending  Illinois  Tax  Amendment  believe  that  the  popular 
willingness  to  give  state  legislatures  the  necessary  authority  to  mee+  modern  r 
and  advancing  economic  conditions,  especially  in  states  like  New  lork  and  j 
Maryland,  where  the  vote  was  taken  on  a  basis  of  actual  experience,  may  be 
reflected  in  Illinois  when  the  Amendment  is  voted  upon. 

TAXATION  IN  ILLINOIS 

[Illinois  State  Journal  of  Springfield.] 

Interest  in  the  taxing  system  of  Illinois  is  revived  by  the  activity  of  the  ' 
Chicago  Civic  Federation,  which  is  urging  submission  of  the  revenue  amend¬ 
ment  proposed  by  the  Illinois  Special  Tax  Commission. 

For  many  years  the  Sta'te  Journal  has  urged  that  something  be  done  with 
reference  to  the  revenue  laws  of  the  state.  For  as  many  years  the  same  thing 


64 


has  been  urged  by  other  newspapers,  by  students  of  public  revenue  system! 
and  by  prominent  business  and  professional  men.  In  all  of  these  years  no  one 
has  raised  his  voice  in  defense  of  the  existing  scheme.  All  agree  that  it  la 
inadequate  and  wholly  vicious;  that  it  is  productive  of  all  sorts  of  injustice; 
that  it  promotes  tax  dodging  and  makes  a  virtue  of  perjury.  •  •  • 

[Canton  Register.] 

The  Canton  Register  reprinted  the  foregoing  editorial  in  full  with  this  com¬ 
ment:  ‘  The  Illinois  State  Journal  contains  a  forceful  and  pertinent  editorial 
on  a  subject  which  the  Canton  Register  for  years  has  urged  upon  attention.” 

“THE  PRESENT  TROUBLE” 

[Chicago  Tribune.] 

The  present  trouble  is  with  the  system  that  encourages  falsification  in  sub¬ 
mitting  a  schedule  of  personalty  taxes,  and  the  issue  is  whether  it  is  to  be 
retained  or  whether  Illinois  will  go  over  the  entire  question  in  a  scientific  re¬ 
study  of  present-day  problems.  The  legislatures  of  New  York,  Minnesota, 
Michigan,  Pennsylvania,  Maryland,  Wisconsin,  Connecticut,  and  Rhode  Island 
have  already  taken  similar  action  years  and  years  ago.  So  Illinois  need  not 
worry  about  being  too  progressive. 

WELL  DONE,  GENTLEMEN 

[Chicago  Herald.] 

*  *  •  The  purpose  of  the  Amendment  is  well  known.  It  recognizes  that 

the  uniformity  in  methods  of  valuation  and  assessment  required  by  the  Con¬ 
stitution  of  1870  did  not  foresee  modern  diversity  of  forms  of  property  and  had 
come  to  work  inequity  instead  of  equity  in  taxation.  If  adopted  by  the  people, 
as  it  will  be,  it  will  empower  the  General  Assembly  to  enact  tax  laws  that  will 
take  note  of  the  fact  that  income-producing  power,  as  well  as  market  value, 
must  be  considered  in  any  fair  taxation  system. 

The  old  system,  meant  to  be  fair,  had  become  outrageously  unfair.  It  over¬ 
burdened  lands  and  other  visible  property;  it  permitted  intangible  property  to 
escape;  it  not  merely  encouraged  “tax  dodging,”  but  virtually  compelled  it  in 
self-defense,  since  disclosure  of  certain  holdings  would  often  result  In  tax 
levies  which  practically  confiscated  the  income.  It  had  become  unworkable; 
it  had  produced  a  situation  of  chaos.  *  *  * 

ILLINOIS  FAULTY  TAX  SYSTEM 

[Troy  Call.] 

Dissatisfaction  with  the  tax  system  in  Illinois  is  widespread  and  growing. 
It  is  due  primarily  to  the  utter  impossibility  of  enforcing  the  general  property 
tax  with  uniformity,  equity,  or  efficiency  against  those  modern  forms  of  wealth 
classed  as  intangible  personal  property.  The  pending  Amendment  will  not  in 
Itself  make  any  change  in  existing  laws.  It  will,  however,  give  to  the  General 
Assembly  authority  (now  withheld  by  the  Constitution)  to  substitute  some  of 
the  modern,  automatic,  and  equitable  methods  found  advantageous  in  other 
states.  The  Amendment  in  no  way  affects  tax  administration,  as  all  taxing 
officers  are  created  by  the  legislature  and  may  be  changed  at  any  legislative 
session  without  constitutional  change. 

The  evils  of  the  present  system — tax  evasion,  inadequate  public  revenues, 
double  taxation,  undue  burdens  on  the  borrower,  inequalities,  uncertainties, 
and  abuses — are  well  known.  The  adoption  of  this  Amendment  is  essential  to 
Improvement.  Until  it  is  adopted  there  can  be  no  real  relief.  •  *  • 

TAX  AMENDMENT  OUGHT  TO  PASS 

[Watseka  Republican.] 

•  •  •  Unfortunately,  the  assessors  universally  make  an  exception  of  notes, 

bonds,  money,  and  everything  that  calls  for  money.  In  practice,  an  assessor 
will  assess  a  business  building  worth  $15,000  at  probably  a  third  of  its  value, 
but  if  the  owner  of  the  building  has  sold  it  and  holds  the  $15,000  in  notes,  or 
part  notes  and  part  cash,  the  assessor  will,  with  a  light  heart,  assess  the  notes 
and  the  cash  at  their  face  value  of  $15,000,  thus  placing  a  three-fold  burden 
on  the  citizen  simply  because  his  property  happens  to  be  in  one  form  rather 
than  in  another. 

If  the  citizen  fails  to  give  in  his  notes  and  money  at  their  full  cash  value, 
the  festive  Board  of  Review  will  likely  bring  him  into  their  presence  and  not 
only  assess  him  at  the  $15,000,  but  add  a  penalty  besides.  *  *  * 

One  effect  of  this  iniquitous  practice  is  to  work  great  injustice  to  many  peo¬ 
ple  poorly  able  to  bear  their  unequal  burden. 

Another  effect  is  to  justify  in  his  own  mind  the  holder  of  such  property  in 
dodging  taxation  altogether  by  not  giving  his  property  to  the  assessor.  It  is 
impossible  to  know  how  much  of  this  kind  of  property  escapes  taxation,  but  it 
is  several  times  as  much  as  ever  gets  on  the  assessment  rolls.  The  system 
is  outworn  and  outrageous. 

Heretofore  the  legislature  has  been  prevented  from  any  legislation  calculated 
to  cure  this  state  of  affairs  by  that  provision  in  the  Constitution  which  requires 
all  classes  of  property  to  be  assessed  and  taxed  according  to  its  cash  value. 

Other  states  have  dealt  with  the  problem  with  considerable  success.  The 


65 


IF  YOU  WANT  TAX  REVISION,  VOTE:  “YES.” 


lavv's  of  New  York  require  that  when  notes,  bonds,  or  other  evidence  of  in¬ 
debtedness  are  first  issued  the  owner  shall  at  once  list  them  with  the  proper 
officer  and  pay  a  bulk  tax  of  a  certain  amount  according  to  the  face  value. 
The  officer  stamps  the  note  or  bond  to  show  the  payment,  without  wh:ch  stamp 
the  instrument  is  not  valid  and  that  is  all  the  tax  the  instrument  ever  pays. 
Experience  has  shown  that  the  amount  of  revenue  derived  from  this  form  of 
taxation  is  several  times  more  than  from  the  same  property  under  the  other 
system.  *  *  * 

A  STUPID  TAX  SYSTEM 

[Monmouth  Review.] 

Apropos  of  tax  indictments  and  humors  of  further  indictments,  of  penalties 
dire  and  examples  calculated  to  effect  wonderful  reforms.  The  Chicago  Tribune 
reminds  officials  and  citizens  once  more  of  the  bottom  fact  that  Illinois  has  an 
impossible  and  incredibly  stupid  tax  system. 

“What  would  the  neutral  world  say,”  asks  the  Tribune,  “were  England  or 
France  or  Germany  to  impose  a  war  of  emergency  taxe  of  40,  50  and  60  per 
cent  on  all  incomes,  including  the  lowest?  *  *  * 

“Now,  Illinois  is  not  at  war.  Yet,  in  literal  truth,  she  is  levying  a  tax  of  40, 
60  and  60  per  cent  on  certain/  classes  of  incomes — the  income  of  the  retired 
small  merchant,  of  the  mechanic,  the  widow  and  the  washerwoman.  Let- any¬ 
one  invest  his  or  her  savings  in  bonds,  stocks  or  mortgages,  or  let  anyone  put 
a  sum  in  a  savings  bank, .and  the  Illinois  law  demands  annually  half  or  two- 
thirds  of  the  income  from  such  securities  or  deposits.  This  is  robbery  and 
confiscation.  *  *  *  A  law  that  no  one  would  dare  to  -propose  in  the  midst 

of  peril  and  bitter  conflict  is  the  ‘nrmal’  law  of  Illinois.  He  who  thinks  it  can 
be  enforced  is  fit  for  bedlam.” 

“FARMER”  ON  DOUBLE  TAXATION 

[Milan  Independent.] 

Editor  Milan  Independent:  “Some  time  since  I  received  from  Secretary  of 
State  Stevensen,  a  copy  of  the  Tax  Amendment  to  the  Constitution  passed  by 
the  last  General  Assembly  in  Illinois,  to  be  submitted  to  the  voter  at  the  No¬ 
vember  election  (so  I  understand),  whose  will  shall  direct  our  legislators  for 
or  against  tax  revision,  in  which  a  change  for  the  better  has  long  been  needed. 

“To  the  mortgaged  farmer,  here  is  the  chance  for  a  change  of  especial  in¬ 
terest,  one  on  which  he  needs  to  be  wide  awake;  such  a  one  has  suffered  with¬ 
out  redress  too  long  from  this  form  of  enslavement.  It  is  his  just  due  at  the 
hands  of  our  law  makers  to  emancipate  him  from  this  criminal  wrong  of 
‘Double  Taxation/  which  compels  him  to  pay  tax  on  the  amount  he  has  in¬ 
vested  in  a  property,  and,  furthermore,  to  pay  tax  on  that  part  which  he  owns, 
but  in  name  only. 

“A  greater  injustice  than  that  is  impossible  to  conceive;  it  is  a  stigma  on  the 
record  of  our  fair  state,  a  violation  of  equal  rights.  A  flagrant  temptation  to 
evade  and  shirk  payment  of  the  tax  necessary  to  defray  the  common  expense, 
by  the  money  loaner,  so  minded.  Years  of  effort  have  been  spent  by  honesty- 
loving  legislators  In  getting  such  a  bill  through  as  we  now  have  to'act  upon. 

“As  voters,  let  us  give  such  an  overwhelming  sanction  for  a  constitutional 
change  to  our  present  Law  on  Taxation,  as  to  leave  no  doubt  in  the  mind  of 
any  would-be  money  catering  representative  who  might  be  tempted  to  barter 
his  manhood  for  lucre.  A  FARMER.” 

ILLINOIS  TO  FOLLOW  SUIT? 

[Dixon  Telegraph.] 

Final  returns  from  the  November  2,  election  in  those  states  which  voted  upon 
tax  amendments  similar  in  character  to  that  which  will  be  voted  upon  in  Illi¬ 
nois,  November  7,  1916,  indicate  that  in  each  case  the  amendment  was  adopted 
by  the  people. 

Each  amendment  voted  upon  abolished  the  general  property  tax,  and  estab¬ 
lished  the  modem  principle  of  classification  in  taxation,  giving  the  state  legis¬ 
latures  wide  latitude  in  the  enactment  of  tax  legislation.  The  states  adopting 
these  amendments  were  Kentucky,  Maryland  and  Massachusetts. 

In  Maryland,  the  legislature  has  assumed  the  right  to  classify  personal  prop¬ 
erty  for  several  years  past,  and  the  listing  of  intangible  wealth  for  assessment 
in  Baltimore  alone  has  increased  from  $6,000,000  to  $208,431,712,  with  an  increase 
of  nine  times  the  amount  of  former  revenues  under  the  modern  tax  methods 
adopted.  The  amendment  was  proposed  to  establish  conclusively  the  constitu¬ 
tional  authority  for  these  modern  lawrs,  and  its  overwhelming  adoption  is  re¬ 
garded  as  a  vote  of  popular  approval  for  the  new  system  after  some  years  of 
practical  experience. 

In  Kentucky  the  adoption  of  the  amendment  which  gives  to  the  legislature 
full  power  in  the  classification  of  property  subject  to  a  limited  referendum 
came  as  a  protest  against  abuses  and  inequalities  of  the  general  property  tax, 
and  followed  a  long  campaign  of  education. 

In  Massachusetts,  another  protest  against  the  antiquated  general  property 
tax  was,  le&.oweiea  in  the  adoption  of  an  amendment  authorizing  the  legis¬ 
lature  to  impose  an  income  tax  as  a  substitute  for  the  personal  property  tax, 
and  otherwise  removing  constitutional  restrictions  upon  legislative  power. 

Friends  of  the  pending  Illinois  Tax  Amendment,  which  would  give  to  the 
Illinois  General  Assembly  authority  to  provide  for  taxation  of  personal  property 
by  such  methods  as  have  proved  most  effective  and  just  in  New  York,  Connec¬ 
ts 


ticut,  Pennsylvania,  Maryland,  Minnesota  and  other  states,  provided  only  that 
taxes  shall  be  uniform  as  to  persons  and  property  of  the  same  class,  are 
greatly  encouraged  by  the  results  of  the  elections  of  November  2.  They  be¬ 
lieve  that  the  popular  willingness  to  give  state  legislatures  the  necessary  au¬ 
thority  to  meet  modern  and  advancing  economic  conditions,  especially  in  states 
like  New  York  and  Maryland,  where  the  vote  was  taken  on  a  basis  of  actual 
experience,  will  be  reflected  in  Illinois  when  the  Amendment  is  voted  upon. 

THE  TAX  AMENDMENT 

[The  Farmers’  Review.] 

According  to  joint  resolutions  adopted  by  both  houses  of  the  Illinois  legis¬ 
lature  the  tax  amendment  proposed  by  Special  Tax  Commission  in  1911  will  be 
submitted  to  the  people  at  the  November  election  next  year.  *  *  *  Under 

the  present  system,  which  has  been  in  vogue  in  Illinois  since  1848,  greater  bur¬ 
dens  are  constantly  heaped  upon  real  property.  Such  a  change  as  provided  by 
this  Amendment  will  make  it  possible  for  the  General  Assembly  to  devise 
scientific  and  just  methods  for  the  raising  of  adequate  public  revenues  and  the 
equalizing  of  existing  tax  burdens  which  will  be  of  general  benefit.  The  sub¬ 
mission  of  this  Amendment  to  the  people  was  urged  by  an  overwhelming  popu¬ 
lar  vote  on  November  5,  1912,  but  failed  to  receive  endorsement  by  the  Gen¬ 
eral  Assembly  elected  at  that  time.  The  present  Assembly  has  acted  wisely 
in  giving  it  favorable  attention.  It  has  opened  the  way  for  needed  tax  reform 
in  Illinois. 

TAX  REFORM  NEEDED?  LEAVE  IT  TO  YOU 

[Albion  Register.] 

Senator  Compton  used  the  right  expression  in  introducing  the  resolution  to 
submit  a  tax  reform  constitutional  amendment  when  he  said  the  General  As¬ 
sembly  should  have  the  power  to  classify  personal  property  “so  that  each  class 
shall  be  assessed  in  proportion  to  its  ability  to  pay  instead  of  in  proportion  to 
its  ability  to  escape.’’ 

How  accurately  this  expression  describes  the  actual  results  of  our  present 
system  was  brought  home  to  the  writer  a  few  days  since  when  in  the  County 
Clerk’s  office.  A  number  of  copies  of  the  report  of  the  proceedings  of  the  1914 
session  of  the  State  Board  of  Equalization,  printed  in  book  form,  nicely  bound 
and  all  ready  to  give  forth  startling  information,  seemed  to  make  no  great  hit 
with  the  reading  public.  Although  these  books  are  not  as  interesting  reading 
as  some  books  of  fiction  they  contain  some  startling  facts,  a  few  of  which  we 
make  mention  and  then  leave  the  question  of  whether  tax  reform  is  needed 
with  the  reader. 

The  total  value  of  all  the  gold  and  silver  plate  and  plated  ware  in  Edwards 
County  is  only  $189.00.  It  would  seem  this  county  is  rather  poor  in  this  line 
were  it  not  for  the  fact  that  our  neighboring  county  of  Wabash,  generally  sup¬ 
posed  to  be  a  wealthier  county  than  Edwards,  contains  gold  and  silver  plate 
and  plated  ware  to  the  value  of  only  $105.00.  The  total  value  of  this  ware  in 
the  entire  Twenty-fourth  District,  comprising  eleven  counties,  is  only  $4,644. 

How  much  would  you  give  for  all  the  diamonds  in  Edwards  County.  Ac¬ 
cording  to  this  statement  of  property  assessed  for  the  year  1914  the  value  of 
all  the  diamonds  in  this  county  was  only — how  much  are  we  offered?  Do  we 
hear  a  bid?  Someone  bid  $50,000;  $40,000;  $20,000;  $10,000.  The  gentleman 
over  there  bids  $507,  and  all  the  diamonds  in  Edwards  County  are  sold  to  the 

gentleman  over  there  for  $507.  And  over  in  Wabash,  just  across  the  creek, 

we  hear  the  auctioneer  call  out  all  the  diamonds  in  Wabash  County  sold  for 
$2,283. 

Kendall  County,  however,  up  in  the  Twelfth  District,  is  in  a  class  by  itself, 
as  there  is  not  a  dollar’s  worth  of  gold  and  silver  plate  and  plated  ware  in  the 
county  and  not  a  person  in  the  county  sports  a  diamond. 

The  report  is  full  of  such  loose  figures  and  the  committee  on  equalization  of 

personal  property  rightfully  speaks  as  follows  in  submitting  their  report  to  the 
State  Board  of  Equalization: 

“We  have  also  considered  the  relative  value  of  personal  property  in  the 
several  counties  and  are  of  the  opinion  that  the  assessed  value -of  the  personal 
property  in  the  several  counties  should  remain  as  fixed  by  local  assessors  and 
the  boards  of  review. 

“This  committee  is  of  the  opinion,  however,  that  in  many  instances  prop¬ 
erty  has  not  been  listed  with  the  local  assessors,  nor  boards  of  review,  thus 
causing  the  smaller  total  valuation  in  the  counties  where  such  omissions  have 
occurred.  But  with  our  powers  limited,  as  they  are  by  law,  we  are  unable  to 
remedy  such  omissions,  without  imposing  unjust  and  unwarranted  tax  burdens 
upon  the  honest  citizen  who  schedules  all  of  his  property.” 


Oakland  Ledger:  Illinois  will  await  relief  from  its  obsolete  tax  laws,  but  it 
does  not  await  relief  patiently. 

Aurora  Beacon:  Must  Illinois  with  all  her  vast  taxable  property  hobble 
along  on  crutches  when  the  vote  of  the  people  will  make  her  stand  up  straight, 
her  head  as  high  as  any  other  state  in  the  whole  lot?  Think  this  over  between 
now  and  November,  Mr.  Voter. 

Sterling  Standard:  The  passage  of  the  Tax  Amendment  resolution  removes 
the  impression  in  many  quarters  that  the  legislature  might  be  constitutionally 
opposed  to  constitutional  reform. 


67 


SILENCE  IS  A  VOTE  TO  KEEP  THE  PRESENT  TAX  SYSTEM. 


Streator  Free  Press:  The  action  of  the  legislature  with  regard  to  the  taxing 
of  Illinois  is  eminently  timely.  It  will  submit  a  Constitutional  Amendment 
asking  that  the  legislature  be  given  power  to  enact  an  entirely  new  system  of 
taxation.  . 

Woodstock  Republican:  Our  state  tax  system  is  lamentably  out  of  date.  It 
practically  encourages  deception,  if  not  open  jerjury.  That  it  is  unjust  is  evi¬ 
dent  on  its  face.  It  is  in  need  not  merely  of  amendment,  but  of  total  repeal. 
It  should  be  built  anew  from  the  ground  up. 

The  Saturday  Evening  Post:  Illinois  has  a  tax  law  that  leaves  a  great  num¬ 
ber  of  citizens  to  the  cheering  alternative  of  committing  perjury  or  suffering  a 
confiscation  of  their  incomes — or  of  being  indicted  for  failing  to  file  a  schedule. 
Tax  officers  and  law  officers  admit  frankly  that  to  enforce  the  law  is  utterly 
Impossible.  *  *  * 

Galesburg  Republican- Register :  A  tax  amendment  question  is  to  be  placed 
on  the  ballot  at  the  coming  election .  and  every  voter  will  have  the  chance  to 
say  whether  he  wishes  reform.  *  *  *  Let  them,  when  they  go  to  the  polls, 

vote  for  this  proposition  and  give  it  such  a  majority  that  there  will  be  no 
question  about  their  wishes. 

Moline  Dispatch:  Tax  reform  is  a  crying  demand  in  Illinois.  *  *  *  A  Tax 

Commission  composed  of  able  men  thoroughly  representative  of  the  people  of 
the  state  *  *  *  had  recommended  to  the  legislature  a  new  and  improved 

system  of  taxation,  one  that  would  call  for  a  Constitutional  Amendment. 
•  *  •  This  tax  reform  question  is  not  partisan.  It  should  have  the  support 

of  voters  of  all  parties. 

Galesburg  Mall:  The  house  yesterday,  when  it  passed  the  joint  tax  resolu¬ 
tion,  which  was  passed  by  the  Senate  the  day  before,  has  opened  the  way  for 
revision  of  Illinois’  unjust  and  unequal  tax  laws.  The  people  of  the  state  them¬ 
selves  will  say  whether  or  not  they  want  the  revenues  of  the  state  revised 
when  they  go  to  the  polls  in  the  fall  of  1916.  There  is  nothing  to  lead  us  to 
believe  that  the  people’s  verdict  will  not  favor  new  tax  laws.  *  *  * 

Edwardsvllle  Republican:  The  Proposed  Tax  Amendment  does  not  directly 
alter  the  taxing  machinery.  In  effect  it  only  removes  certain  restrictions  which 
will  allow'  the  legislature  to  make  changes  that  will  permit  classification  of 
property.  However,  any  relief  from  the  unsatisfactory  tax  laws  will  be  grate¬ 
fully  received  by  the  taxpayers  of  the  state,  and  the  vote  on  this  Amendment 
will  no  doubt  demonstrate  the  interest  of  the  people  of  the  state  in  the  matter. 

Elgin  News:  The  need  of  a  revision  in  our  taxing  system  is  only  too  ap¬ 
parent  to  any  one  who  takes  a  few  minutes  for  reflection.  Here  in  Elgin  we 
are  at  the  limit  in  the  matter  of  taxation.  Yet  the  revenue  derived  therefrom 
is  insufficient  to  take  care  of  the  absolute  needs  of  the  city.  We  must  either 
issue  bonds  or  accumulate  a  floating  indebtedness  that  will  grow  from  year  to 
year.  If  all  the  property  in  Elgin  were  actually  taxed,  the  revenue  derived 
therefrom  at  the  present  rate  would  be  more  than  ample.  But  it  never  has 
been  and  never  will  be  under  the  present  law. 

Albion  Register:  After  long  years  of  effort  the  General  Assembly  of  Illinois, 
in  the  session  just  closed,  has  submitted  to  a  vote  of  the  people,  the  tax 
amendment  to  the  state  Constitution,  designated  to  give  to  the  legislature  the 
necessary  power  to  revise  the  personal  property  tax  laws  of  the  state  upon  a 
modern,  just,  and  workable  basis.  The  approval  of  a  majority  of  the  male 
vote  of  the  state  cast  at  the  general  election  of  1916  will  be  necessary  to  make 
this  Amendment  a  part  of  our  Constitution.  To  secure  this  large  endorsement 
will  require  persistent  and  effective  educational  work  during  the  ensuing 
months  before  the  question  is  finally  settled  and  settled  right. 

Kewanee  Courier:  The  resolution  to  submit  a  tax  reform  amendment  to  the 
Constitution,  already  through  the  Senate,  passed  the  Illinois  house  yesterday 
with  130  affirmative  votes.  It  will  be  submitted  to  the  vote  to  the  people  at 
the  November  election  of  1916.  It  cannot  be  predicted  with  certainty  what  the 
final  outcome  of  this  proceeding  will  be,  but  it  is  a  rather  safe  statement  that 
tax  conditions  for  the  people  will  be  made  better  rather  than  worse  in  Illinois, 
If  the  resolution  is  approved  by  the  voters.  Injustice  and  inequity  should  give 
way  to  fairness  In  our  Illinois  system  of  taxing,  and  this  action  of  the  legis¬ 
lature,  as  we  understand  it,  is  a  step  in  the  right  direction. 


VOTE  FOR  THE  TAX  AMENDMENT 

[Steam  Shovel  and  Dredge.] 

*  *  *  The  proposed  amendment  is  of  particular  interest  to  the  farmer  and 

the  wage- earner.  *  *  *  The  farmer  cannot  hide  his  farm  implements  or  his 

livestock.  *  *  •  The  wrorkingman  cannot  hide  his  home,  if  he  owns  it.  or  his 
furniture.  *  *  *  The  proposed  amendment  should  be  adopted  by  an  over¬ 
whelming  vote,  as  it  is  a  step  in  the  direction  of  real  tax  reform. 


6S 


PART  IV— APPENDIX 


QUESTIONS  ANSWERED 

1.  Question:  Is  it  unfair  to  the  landowner  to  make  it  possible 
for  the  General  Assembly  to  provide  that  some  kinds  of  personal 
property  should  be  taxed  at  a  lower  rate  than  lands? 


Answer:  No.  1.  For  the  very  practical  reason  that  the  present 

method  of  attempting  to  tax  all  classes  of  property  at  the  same  rate 
has  failed  after  long  years  of  experience  so  utterly  to  produce  any 
material  amount  of  revenue  from  intangible  wealth  that  real  estate  is 
now  bearing  a  disproportionate  and  constantly  increasing  share  of  the 
tax  burden. 

2.  For  the  further  practical  reason  that  the  present  system  dis¬ 
courages  individual  acquisition  of  land.  It  places  disproportionate  bur¬ 
dens  on  real  property,  and  also  compels  the  man  who  buys  on  part 
payments  to  pay  not  only  these  taxes,  but  also — to  a  considerable 
extent — the  taxes  which  the  law  requires  to  be  assessed  against  the 
mortgage. 

3.  Because  actual  experience  of  other  states  proves  that  vastly 
greater  revenues  than  the  present  unworkable  Illinois  method  can  pro¬ 
duce  are  derived  by  taxing  intangible  wealth,  either  on  a  basis  of 
income  or  at  a  low  flat  rate,  and  that  real  estate  burdens  are  propor¬ 
tionately  reduced. 


2.  Question:  Why  should  not  all  property  be  taxed  in  the  same 
way  and  at  the  same  rate? 


Answer:  Because,  as  explained  on  page  12,  personal  property  falls 
naturally  into  various  classes,  differing  in  character,  basis  upon  which 
income  is  computed,  and  many  other  particulars.  Efforts  to  enforce 
the  so-called  “uniform"  method  against  modern  forms  of  wealth  have 
proved  everywhere  an  utter  failure. 


3.  Question:  Why  not  apply  the  automatic  methods  now  used 
by  states  which  classify  personal  property  to  the  taxation  of 
intangible  values  in  Illinois  under  the  present  system? 

/  Answer:  So  long  as  there  existed  the  possibility  of  tax  rates  which 
would  absorb  from  one-fourth,  to  more  than  all,  of  the  income  from 
the  various  intangible  values,  the  most  effective  methods  would  serve 
only  to  drive  such  wealth — practically  all  investments — out  of  the  state, 
,  and  keep  them  out.  Automatic  methods  will  bring  out  revenue  only 
in  conjunction  with  rates  which  are  on  an  economic  and  scientific 
basis.  Only  on  such  a  basis  may .  automatic  methods  be  counted  upon 
to  give  honest  citizens  the  satisfaction  of  fairness  and  certainty,  and 
to  reduce  wilful  tax-dodging  to  a  minimum. 


69 


TALK  TO  YOUR  NEIGHBORS  AND  FRIENDS  ABOUT  THIS. 


4.  Question:  Would  not  a  rigid  enforcement,  by  various  means, 
of  the  present  “uniform”  system,  bring  all  property  to  the  tax 
lists,  and  thus,  by  reducing  the  tax  rate,  make  it  possible  for 
intangibles  to  pay  on  the  same  basis  as  other  property  and 
still  remain  in  the  state? 

Answer:  No.  Thousands  of  owners  of  intangible  wealth  would 

fear  that  their  neighbors  neither  would  make  a  full  declaration  nor 
would  be  caught  by  the  assessor4.  Rather  than  risk  taxation  at  the 
actual  current  rates,  indicated  above,  would  remove  the  situs  of  their 
property  from  the  state.  Less  revenues  from  intangibles,  instead  of 
greater,  would  result,  and  those  who  did  not  escape,  together  with 
the  owners  of  land  and  visible  property,  would  pay  the  penalty.  The 
chapter  on  RIGID  ENFORCEMENT  in  Part  I  of  this  volume,  answers 
this  question. 

5.  Question:  Is  it  not  dangerous  to  give  to  the  General  Assem¬ 
bly  the  practically  unrestricted  power  over  tax  laws  affecting 
personal  property?  Would  it  not  have  been  better  to  have 
written  into  the  Constitution  the  precise  methods  for  taxation 
which  would  be  desirable? 

Answer:  If  broad  legislative  authority  is  dangerous  in  a  Constitu¬ 
tion,  the  United  States  Constitution  is  the  most  dangerous  fundamental 
document  of  government  in  existence.  It  lays  down  a  few  basic  prin¬ 
ciples  and  allows  to  the  Congress  the  broadest  discretion,  without 
which  the  wonderful  and  rapid  development  of  this  country  and  the 
constant  popular  control  of  changing  conditions  would  have  been  im¬ 
possible.  To  be  sure,  it  is  possible  that  a  legislative  body  may  abuse 
the  power  which  it  must  have  if  it  is  to  benefit  the  people  and  keep 
pace  with  advancing  conditions.  Serious  abuses,  however,  are  not 
frequent;  when  they  occur  they  are  speedily  remedied  by  amendment 
or  repeal  of  objectionable  laws.  The  Illinois  Constitution  gives  wide 
legislative  discretion  in  many  lines. 

The  Illinois  Legislature  has  shown  no  disposition  seriously  to  abuse 
the  broad  powers  allowed  in  other  fields.  Why  hesitate  to  permit  it 
to  meet  tax  problems,  present  and  future,  in  the  light  of  the  best 
information  and  experience  obtainable?  Is  it  feared  that  wealth  will 
be  unduly  harassed,  or  that  it  wrill  be  unduly  exempted?  Other  states, 
with  even  broader  powers,  have  not  gone  to  either  extreme.  It  is  a 
fair  statement  that  the  Illinois  Legislature  probably  is  neither  better 
nor  worse  than  those  in  New  York,  Pennsylvania,  Connecticut,  Rhode 
Island,  Maryland,  Minnesota  or  a  number  of  other  states. 

It  is  not  practicable  to  draw  up  in  a  single,  iron-clad  constitutional 
amendment  the  provisions  for  taxing  all  of  the  various  forms  of 
wealth  that  exist  now,  or  that  may  exist  in  the  future.  The  great 
trouble  with  the  present  Revenue  Article  of  the  Constitution  is  that 
it  was  drawn  expressly  to  fit  the  conditions  of  1848.  Yet  that  article 
is  restrictive  in  only  one  particular.  It  lays  down  no  details  of  taxa¬ 
tion,  but  only  a  single  principle.  That  principle  is  outgrown.  What 
would  happen  if  a  detailed  legislative  provision  were  written  into  the 
Constitution  to-day? 

It  is  not  the  function  of  a  Constitution  to  provide  laws  for  the 
detailed  operation  of  the  public  business,  but  rather  to  lay  down  in 
statements  of  fundamental  principles  the  outline  of  government. 

If  the  General  Assembly  is  to  remedy  the  present  inequitable  condi¬ 
tions  it  must  have  the  authority  conferred  by  the  Pending  Amend¬ 
ment.  It  can  help  the  people  in  no  other  way. 


70 


6.  Question:  Inasmuch  as  the  Pending  Amendment  authorizes 
only  the  classification  of  personal  property  instead  of  giving 
unlimited  authority  of  classification  over  all  property,  should  it 
not  be  defeated  on  the  ground  that  it  is  only  a  halfway  measure, 
and  not  worth  while? 


Answer:  By  no  means.  The  most  apparent  cause  for  the  break¬ 

down  of  the  present  Illinois  tax  system  is  that  it  cannot  be  effectively 
applied  to  personal  property.  In  this  country  the  principle  of  classifi¬ 
cation  has  been  practically  and  satisfactorily  demonstrated  only  with 
reference  to  personal  property.  Practically  the  only  experiments  of 
proved  value  in  classification  of  real  property  have  been  in  the  taxa¬ 
tion  of  lands  in  process  of  reforestation.  Therefore  the  Pending 
Amendment  will  give  to  the  Illinois  General  Assembly  the  power  to 
place  Illinois  as  far  in  the  line  of  real  progress  as  any  one  of  the 
United  States  thus  far  has  advanced  in  tax  matters. 

This  point  is  raised  only  by  the  particular  group  of  single  tax 
believers  which  is  financed  by  the  Fels  Fund.  It  represents  a  narrow 
and  untenable  view.  Nowhere  has  the  theory  of  placing  all  tax  bur¬ 
dens  upon  land  values  gone  far  beyond  experiment.  In  the  United 
States  it  has  not  gone  far  beyond  theory.  Popular  sentiment,  judged 
by  the  -votes  cast  wherever  there  has  been  thorough  discussion,  evi¬ 
dently  is  far  from  ripe  for  this  plan  of  taxation.  Others  who  do  not 
believe  in  the  single  tax  theory  have  favored  a  broader  amendment, 
but  realize  the  folly  of  refusing  to  make  all  the  progress  possible,  and 
are  for  the  Pending  Amendment  even  though  it  does  not  meet  all  of 
their  ideas.  On  the  same  broad  ground  of  good  citizenship  a  number 
who  sincerely  believe  in  the  single  tax  theory  endorse  the  Pending 
Amendment.  It  will  give  the  General  Assembly  power  to  deal  with 
Illinois’  most  pressing  problems  of  tax-dodging,  double  taxation  and 
inequality.  That  is  a  long  step  in  advance,  and  well  worth  while. 


7.  Question:  The  Public  Policy  proposition  approved  by  the 
voters  overwhelmingly  Nov.  5,  1912,  referred  broadly  to  the 
classification  of  property.  The  amendment  as  submitted  provides 
only  for  the  classification  of  personal  property.  Has  not  the 
will  of  the  people  been  flouted  and  should  not  the  amendment 
be  defeated  for  that  reason? 

This  question,  like  the  preceding,  is  raised  by  the  Fels  Fund  group. 
It  is  not  raised  in  good  faith.  In  1912  this  same  group  futilely  urged  the 
voters  to  vote  down  this  same  Public  Policy  proposition.  Now  they 
urge  the  voters  to  reject  the  Pending  Amendment  because,  forsooth, 
it  does  not  conform  verbatim  to  the  Public  Policy  proposition  they 
then  condemned.  They  would  seem  to  be  against  all  progress  that  is 
not  of  their  own  brand. 

The  Pending  Amendment  has  been  submitted  by  the  General  Assem¬ 
bly  .precisely  as  prepared  by  the  Illinois  Special  Tax  Commission  in 
1911,  in  the  form  discussed,  editorialized  upon  and  generally  endorsed 
throughout  the  state  since  that  time.  The  Public  Policy  proposal  was 
placed  upon  the  ballot  in  1912  by  those  who  now  support  this  amend¬ 
ment.  It  was  worded  broadly  purposely  so  that  the  vote  might  be 
taken  on  the  general  principle  of  classification,  and  so  that  the 
General  Assembly  might  not  feel  bound  to  the  particular  form  of 
amendment  proposed  by  the  Special  Tax  Commission  and  hesitate  in 
its  action  should  a  popular  sentiment  develop  either  for  a  broader,  or 
a  slightly  more  restricted,  provision  than  the  Commission  had  prepared. 


71 


WRITE  FOR  ADDITIONAL  COPIES. 


No  such  sentiment  developed,  and  the  amendment  has  been  submitted 
exactly  as  the  whole  state  has  understood  it  for  the  past  four  years. 

In  speaking  of  the  motives  of  this  group  as  compared  with  those 
who  favor  the  Pending  Amendment,  Harrison  B.  Riley,  the  member 
of  the  Illinois  Special  Tax  Commission  who  led  the  effort  to  have 
that  commission  recommend  a  broader  amendment,  has  this  to  say: 

“They  seek  to  accomplish  a  social  revolution  through  the  medium- 
ship  of  taxation.  We  are  seeking  to  obtain  that  which  we  are  work¬ 
ing  for  only.  Our  cards  are  on  top  of  the  table.  We  want  equitable 
tax  laws,  and  we  do  not  care  to  have  those  laws  so  arranged  that  they 
will  help  one  person  and  not  another.  In  other  words,  any  state 
legislation  in  the  nature  of  a  protective  tariff  kind  of  revenue  law  has 
no  place  among  the  citizens  of  a  State,  common  citizens  of  the  same 
country  and  protected  by  the  same  laws,  however  useful  it  may  be 
in  dealing  with  foreigners  to  whom  we  owe  no  duty.  We  who  are 
interested  in  tax  reform  are  interested  in  that  only.” 

Our  single  tax  friends  would  be  no  worse  off  under  the  Pending 
Amendment  than  they  are  now  under  the  present  system.  They  can¬ 
not  deny  that  the  State  of  Illinois  would  be  much  better  off  under 
the  Pending  Amendment,  even  though  they  may  think  that  it  would 
not  be  so  well  off  as  under  the  single  tax.  Those  who  sincerely 
believe  in  the  single  tax  and  are  firm  in  the  conviction  that  no  other 
system  will  promote  justice,  should  be  willing  to  have  other  tax 
methods  given  a  fair  trial.  If  their  views  are  sound  a  process  of 
elimination  will  help  their  cause. 

As  reiterated  in  other  pages,  only  those  who  believe  the  present  tax 
system  needs  no  change  will  fail  to  vote  for  the  Pending  Amendment. 
Those  who  believe  tax  revision  is  desirable  in  Illinois  will  not  be  con¬ 
fused  by  such  insincere  and  trivial  considerations. 


WASTE  AND  LOSS  IN  TAX  COLLECTION 

Impossibility  of  making  personal  property  assessments  accurately 
and  in  proportion  to  ability  to  pay,  costs  every  municipality  and 
county  in  the  state  thousands  of  dollars  in  useless  postage  and  col¬ 
lection  expense.  The  difference  between  the  estimated  revenues  based 
on  assessed  personalty  valuations  for  a  given  year,  and  the  amount 
actually  collectable  runs  into  the  millions.  In  Cook  County  the 
amounts  of  1913  tax  bills  in  the  hands  of  the  County  Collector,  still 
uncollected,  totals  about  $2,500,000.  Peoria  County  reports  $7,678.82 
still  uncollected  for  1913.  Adams  County  estimates  an  annual  shrink¬ 
age  of  $1,800.  In  Sangamon  County,  in  1913,  on  a  valuation  of 
$153,833,  the  uncollected — mostly  impossible  to  collect — was  $8,801; 
in  1914,  on  a  valuation  of  $147,607,  the  uncollected  was  $7,609. 
These  items  for  the  most  part  represent  assessments  which  never 
should  have  been  placed  on  the  books.  Under  the  present  Consti¬ 
tutional  provision  they  are  inevitable.  It  costs  as  much  to  spread 
and  more  to  seek  to  collect  on  each  of  these  as  it  does  to  spread 
and  collect  on  a  paying  assessment. 


72 


ILLINOIS  TOTAL  VALUATIONS — 1915* 


The  following  are  the  valuations  of  property  returned  for  taxation  In 
Illinois  in  1915  as  equalized  by  the  State  Board  of  Equalization,  and  rep¬ 
resent  the  ‘‘assessed  value”  or  one-third  of  the  “fair  cash  value”  of  prop¬ 
erty  so  reported: 


Land  . $  695,766,064 

Land  and  lots  .  1,053,442,947 

R.  R.  property  (real)  assessed  locally .  6,904,126 

R.  R  property  (personal)  assessed  locally  .  2,965,140 

R.  R.  property  assessed  by  State  Board  .  208,644,327 

Capital  stock  of  corporations  other  than  railroads .  27,330,184 


Horses  . $  30,838,085 

Cattle  .  18,967,290 

Mules  and  asses  .  4,294,497 

Sheep  .  317,703 

Hogs  . 4,629,239 

Steam  engines,  including  boilers  .  3,232,445 

Fire  and  burglar-proof  safes  .  247,355 

Billiard,  pool,  etc.,  tables  .  141,764 

Carriages  and  wagons  .  11,261,136 

Watches  and  clocks  .  666,507 

Sewing  and  knitting  machines  .  765,181 

Pianos  .  4,321,557 

Melodeons  ana  organs  .  169,705 

Franchises  .  105,871 

Annuities  and  royalties  .  72,745 

Patent  rights  .  197,743 

Steamboats,  sailing  vessels,  etc .  205,132 

Merchandise .  44,754,829 

Material  and  manufactured  articles  .  8,274,112 

Manufacturers’  tools,  implements  and  machinery .  9,294,490 

Agricultural  tools,  implements  and  machinery .  4,487,663 

Gold  and  silver  plate  and  plated  ware  .  272,332 

Diamonds  and  jewelry  .  610,489 

Moneys  of  banker,  broker,  etc.  .  13,365,027 

Credits  of  bank,  banker,  broker,  etc .  9,893,142 

Moneys  other  than  banker,  etc .  33,560,345 

Credits  other  than  banker,  etc .  41,575,686 

Bonds  and  stocks  .  10,576,904 

Shares  of  capital  stock  of  companies  not  of  this  state  1,364,852 

Pawnbroker  property  .  606,699 

Property  of  corporations  not  before  enumerated  .  19,239,280 

Bridge  property  .  162,660 

Property  of  saloons  and  eating  houses .  609,816 

Household  and  office  furniture  . * .  19,633,107 

Investments  in  (secured  by)  real  estate  and  improvements 

thereon  .  1,209,300 

Grain  of  all  kinds  .  10,263,513 

Shares  of  stock  of  state  and  national  banks  .  64,476,036 

All  other  property  .  133,256,132 


507,820,349 


Total  assessed  value  of  all  property  . $2,502,873,136 


♦These  figures  were  supplied  in  advance  of  the  printed  report  of  the  State 
Board  of  Equalization,  through  the  courtesy  of  State  Auditor  James  J.  Brady. 


73 


IF  YOU  THINK  PRESENT  TAX  LAWS  ARE  BAD,  VOTE  FOR  THE  AMENDMENT. 


THE  CIVIC  FEDERATION  OF  CHICAGO 

What  It  Is  and  What  It  Has  Done 


The  Civic  Federation  of  Chicago  was  Incorporated  Feb.  3,  1894,  at  Spring- 
field,  Ill.,  in  accordance  with  the  provisions  of  the  Act  for  incorporation  of 
societies  and  associations  not  for  pecuniary  profit,  in  force  July  1,  1872.  The 
objects  of  the  Federation  are  stated  in  Sec.  3  of  the  amended  Articles  of 
Association,  filed  with  the  Secretary  of  State,  May  12,  1903,  as  follows: 

*'3.  The  purposes  of  this  Federation  shall  be  local,  municipal  improvement 
and  the  betterment  of  civic  conditions;  the  promotion  of  efficiency  In  the 
public  service,  and  the  furtherance  of  wholesome  legislation.” 

A  few  of  the  many  activities  of  the  Federation  since  1894  will  indicate  the 
character  of  its  work: 

1894 — Organization  of  Bureau  of  Charities  out  of  the  .  Committee  on 
Philanthropy. 

1896 —  Cleaned  the  streets  for  six  months  and  demonstrated  it  could  be  done 
for  $10  per  mile,  while  the  city  had  been  paying  $18.50.  Contracts  let  next 
year  for  $10.50,  and  contract  system  subsequently  abolished.  Inaugurated 
movement  for  vacation  schools  and  conducted  the  first  one  this  year. 

1897 —  Organized  the  Citizens'  Committee  which  drafted  the  new  Revenue 
Law,  and  began  a  campaign  for  its  adoption. 

1899 — In  co-operation  with  the  Chicago  Real  Estate  Board  secured  new 
Revenue  Law,  doing  away  with  Old  system  of  blackmail  in  connection  with 
assessments. 

1901 —  Secured  passage  of  Township  Consolidation  Law  for  Cook  County. 

1902 —  Secured  a  vote  on  Township  Law,  and  by  its  adoption  abolished  town 
evils. 

1904 — Successfully  conducted  the  state-wide  campaign  for  the  adoption  of 
the  new  Charter  Constitutional  Amendment. 

1907 —  Through  a  special  committee  prepared  an  amendment  to  the  Con¬ 
stitution,  designed  to  permit  classification  of  property  for  taxation. 

The  Senate  Revenue  Committee  to  which  it  was  referred,  hesitated,  how¬ 
ever,  to  recommend  such  an  amendment  and  reported  Instead  a  bill  provid¬ 
ing  for  a  special  State  Tax  Commission  to  make  a  thorough  investigation  and 
report  Its  recommendations  to  the  next  legislature.  This  bill  was  passed,  but 
was  vetoed  on  technical  grounds. 

1908 —  The  Federation  compiled,  published  and  circulated  widely  a  Summary  of 
the  Reports  of  Special  State  Tax  Commissions  to  show  the  general  recognition 
being  given  to  the  principle  of  classification. 

1909 —  Revived  bill  for  creation  of  a  Special  State  Tax  Commission  and  suc¬ 
cessfully  urged  its  re-enactment  in  improved  form  by  the  Forty- sixth  Gen¬ 
eral  Assembly.  This  bill  was  approved  and  the  Commission  subsequently 
appointed. 

1910 —  Laid  before  the  Special  Tax  Commission  data  and  arguments  in  sup¬ 
port  of  a  constitutional  amendment  establishing  the  principle  of  classification. 

1911 —  Endorsed  the  Amendment  to  the  Constitution  recommended  by  the 
Illinois  Special  Tax  Commission  and  took  a  leading  part  in  urging  its  sub¬ 
mission  by  the  Forty-eighth  General  Assembly.  Amendment  defeated  by 
competing  constitutional  proposals. 

1911 —  Secured  passage  of  Adult  Probation  Law. 

1912 —  Joined  with  other  organizations  in  urging  a  special  session  of  the 
Forty-seventh  General  Assembly  •  to  submit  an  amendment  to  Article  XIV 
permitting  submission  of  three  amendments  at  a  time  in  order  to  avoid  further 
constitutional  deadlock.  This  amendment  failed. 

With  the  co-operation  of  many  organizations  throughout  the  State,  secured 
120,774  signatures  to  a  public  policy  petition  submitting  for  advisory  vote 
the  question  of  amending  the  Constitution  to  permit  classification  of  property. 

Conducted  an  educational  campaign  throughout  the  State  which  resulted, 
on  Nov.  5,  1912,  in  a  vote  for  this  proposal  of  641,189  to  187,467. 

1912 —  Took  a  leading  part  In  securing  enactment  of  the  ordinance  protecting 
Chicago’s  milk  supply;  provided  the  administrative  machinery  and  financial 
support  for  the  Citizens’  Milk  Committee. 

1913 —  Took  part  In  urging  the  General  Assembly  to  submit  the  tax  amend¬ 
ment,  which,  however,  was  defeated  because  of  conflicting  constitutional 
proposals. 

1913 —  Called  together  and  financed  the  Illinois  Probation  Conference  (Feb. 
10  and  11),  in  which  men  and  women  of  note,  judges,  probation  officers  and 
social  workers  participated,  and  which  resulted  in  great  good  to  the  proba¬ 
tion  system. 

1914 —  Inaugurated  a  thorough- going  campaign  of  education  throughout  the 
State,  organizing  the  Illinois  Tax  Amendment  Committee. 

1915 —  Successfully  urged  amendments  to  the  Adult  Probation  Act  promotive 
of  greater  discretion  in  its  use  and  increased  efficiency  in  its  administration. 

1915 — Again  took  a  leading  part  in  successfully  urging  the  submission  of 
the  tax  amendment  upon  the  General  Assembly,  which  has  now  responded 
to  popular  demand. 


74 


INDEX 


Abt,  Hon.  P.  W.,  «0. 

Adams,  Thos.  S — Endorses  Illinois 
Amendment  and  classified  taxation, 
63.  On  Mortgage  Taxation,  9. 
Alabama,  60. 

Albion  Register,  67,  68. 

Amendment— Illinois  Pending,  Advis¬ 
ory  Vote  for,  1912,  59;  Adoption, 
When  and  How,  17;  Commended  by: 
Adams,  T.  S.,  53;  Bennion,  H.,  50; 
Bullock,  C.  J.,  53;  Foote,  A.  R., 
51;  Harris,  A.  W.,  51;  Howe,  S.  T., 
52;  Illinois  Newspapers,  62-68;  James, 
E.  J.,  61;  Jess,  F.  B.,  47;  Judson, 
H.  P.,  51;  Lord,  Geo.,  30;  Purdy, 
Lawson,  53;  Seavey,  C.  S.,  43;  Selig- 
man,  E.  R.  A.,  52.  Described,  3,  16- 
17;  Drafted  by,  14-15;  Essential  to 
any  Improvement,  3,  4,  17,  30,  43, 
52-54.  Submission  by  General  As¬ 
sembly,  60-62.  Text,  etc.,  15-16. 
Kentucky,  adopted,  Nov.  2,  1916,  25. 
Maryland,  adopted,  Nov.  2,  1915,  26. 
Massachusetts,  adopted,  Nov.  2, 

1915,  29. 

New  York,  defeated,  Nov.  2,  1915, 
33. 

South  Dakota,  pending,  Nov.  7, 

1916,  49. 

Andrews,  Charles  A.,  28-29. 

Andrus,  Hon.  Henry,  60. 

Arizona,  20. 

Arkansas,  60. 

Assessed  Valuations  in  Illinois,  8. 
Atwood,  Hon.  John  A,  60. 

Aurora  Beacon,  67.  1 

Austin,  Hon.  Henry  W.,  60. 

Automatic  Taxation,  18. 

Bailey,  Hon.  Martin  B.,  60. 

Baldwin,  Hon.  P.  G.,  60. 

Banks,  Taxation  of:  Connecticut,  21- 
22;  Maryland,  27;  New  York,  36, 
Vermont,  40. 

Bardill,  Hon.  J.  G.,  60. 

Barker,  Hon.  Elwood,  60. 

Barr,  Hon.  R.  J.,  60. 

Basel,  Hon.  W.  H.,  60. 

Beacon,  Aurora,  67;  Paris,  63. 

Bennion,  Hon.  H.,  49. 

Benson,  Hon.  O.  E.,  60. 

Bentley,  Hon.  W.  H.,  60. 

Bippus,  Hon.  F.  J.,  60. 

Bliss,  Hon.  Z.  W.,  Low  Rate  Taxa¬ 
tion  in  Rhode  Island,  39. 

Board  of  Review — Violates  Law  in  In¬ 
terest  of  Equity,  10. 

Boehm,  Hon.  J.  J.,  60. 

Boyd,  Hon.  R.,  60. 

Boyer,  Hon.  T.  H.,  60. 

Boyle,  Hon.  Emmet  D.— Favors  Classi¬ 
fication,  46. 


Brewer,  Hon.  F.  W.,  60. 

Broderick,  Hon.  J.,  60. 

Brown,  Hon.  W.  M.,  60. 

Bruce,  Hon.  G.  R.,  60. 

Bryce,  Hon.  J.  L.,  Secy.  Arizona  Tax 
Commission,  20. 

Bullock,  Prof.  C.  J. — Endorses  Illinois 
Amendment,  53;  praises  systems  of 
Maryland  and  Pennsylvania,  26. 
Burns,  Hon.  J.  S.,  60. 

Butler,  Hon.  W.  J.,  60. 

Buxton,  Hon.  T.  C.,  60. 

Caldwell,  Hon.  B.  F.,  15.  *4 

California,  42-43. 

Call,  Troy,  65. 

Campbell,  Hon.  F.  C„  60. 

Campbell,  Hon.  T.,  60. 

Capital  Stock  Tax,  7-8,  11.. 

Carroll,  Hon.  P.  J.,  60. 

Centralization  of  Administration — 
would  follow  efforts  at  rigid  en¬ 
forcement  of  present  system,  13. 
Chicago  Association  of  Commerce,  62. 
Chicago  Board  of  Trade,  62. 

Chicago  Real  Estate  Board,  62. 
Chicago  Examiner,  63. 

Chicago  Daily  News,  63. 

Chicago  Herald,  65.  i  i 

Chicago  Tribune,  65. 

Choses-in-Action,  21. 

Citizens’  Association  of  Chicago,  62. 
Civic  Conference  of  Cook  County,  62. 
Classification,  Principle  of  in  Taxa¬ 
tion — authorized  or  applied  in  vari¬ 
ous  States,  19-42;  endorsed  by; 
Adams,  T.  S.,  53;  Bennion,  H.,  49; 
Bliss,  Z.  W.,  39;  Board  of  Taxes  and 
Assessments  of  New  York  City,  34- 
35;  Boyle,  E.  D.,  46;  Bullock,  C.  J.t 
53;  Colorado  Tax  Commission,  21; 
Corbin,  W.  H.,  21;  Davison,  A.  H., 
23-24;  Foote,  A.  R.,  51;  Girdwood, 
A.  C.,  26-27;  Hall,  Gov.  L.  E.,  45; 
Hanna,  L.  B.,  36;  Harris,  A.  W.,  51; 
Henry,  C.  M.,  48;  Howard,  E.  B., 
36;  Howe,  S.  T.,  52;  Illinois,  59; 
Illinois  Newspapers,  62;  Illinois  Spe¬ 
cial  Tax  Commission,  15;  James,  E. 
J.,  14,  51;  Jess,  F.  B.,  47;  Judson, 
H.  P.,  51;  Locke,  J.  W.,  28;  Lyon, 
W.  H.,  54;  Manning,  R.  I.,  48;  Mc¬ 
Gill,  J.,  50;  Minnesota  Tax  Com¬ 
mission,  31-32;  Moise,  G.  E.,  45; 

National  Tax  Association,  54;  Ne¬ 
braska  Special  Tax  Commission,  46; 
New  York,  33-36;  North  Dakota,  36; 
Pattangall,  W.  R.,  45;  People  of 
Kentucky,  Maryland  and  Massachu¬ 
setts,  25-28;  Purdy,  L.,  53;  Pervier, 
C.  C.,  58;  Robinson,  W.  A.,  55-56; 
Seavey,  C.  S.,  and  Cowan,  W.  V., 
42-43;  Seligman,  E.  R.,  52;  Sparks, 


75 


‘YES.**  —NO  VOTE  COUNTS  AS  A  VOTE  “NO.1 


O.  W.,  22;  Spaulding,  R.  H.,  47;  U. 
S.  Supreme  Court — Justice  Lamar, 
64;  Wisconsin  Tax  Commission,  41- 
42;  Wolcott.  E.  H.,  44-67. 

Cliffe,  Hon.  A.  C.,  60. 

Colorado,  21. 

Commercial  Club  of  Chicago,  62. 
Comparative — Burdens,  7;  Valuations 
and  Statistics,  7-9;  Revenues  from 
Intangibles — Chicago  and  Baltimore, 
12;  Connecticut,  21;  Maryland,  27; 
Minnesota,  31;  New  York,  33-35; 
Pennsylvania,  37-38;  Rhode  Island, 
39;  Wisconsin,  41-42. 

Compton,  Hon.  W.  A.,  60. 

Confiscatory  Tax  Rates,  9-10. 

Conlon,  Hon.  B.  J„  60. 

Connecticut,  21. 

Constitutional  Amendments — 

See  Amendments. 

Cook  County  Real  Estate  Board,  62. 
Corbin,  Hon.  W.  H.,  21. 

Cornwell,  Hon.  W.  H.,  60. 

Cost  of  living,  14. 

Courier,  Gibson  City,  68;  Kewanee,  68. 
Cowan,  Hon.  W.  V.,  43. 

Craig,  Hon.  A.  M.,  14. 

Curran,  Hon.  T.,  60. 

Curren,  Hon.  C.,  60. 

Curtis,  Hon.  E.  C.,  60. 

Dahlberg,  Hon.  G.,  60. 

Dailey,  Hon.  John,  60. 

Daily  News,  Chicago,  63,  68. 

Dalton,  Hon.  F.  R.,  60. 

Davies,  Hon.  J.  E.,  30. 

Davis,  Hon.  J.  E.p  60. 

Davison,  Hon.  A.  H.,  23-24. 

Delaware,  22. 

Denvir,  Hon.  J.  T.,  60. 

Desmond,  Hon.  J.  T.,  60. 

Devereux,  Hon.  T.  P.,  60. 

Devine,  Hon.  J.  P.,  60. 

De  Young,  Hon.  F.  R.,  60. 

Dispatch,  Moline,  68. 

Dixon  Telegraph,  66. 

Donahue,  Hon.  D.  D.,  60. 

Donlan,  Hon.  J.  M.,  60. 

Double  Taxation,  complaint  of,  3;  ex¬ 
amples  of,  10-11;  views  of  Hon.  C.  C. 
Pervier,  58;  Prairie  Farmer,  62;  Troy 
Call,  65;  Gibson  City  Courier,  64; 
Milan  Independent,  66. 

East  St.  Louis,  Sun,  63;  Tribune,  64. 
Edwardsville,  Intelligencer,  64;  Repub¬ 
lican,  68. 

Elgin,  News,  68. 

Ellis,  Hon.  D.  B.,  60. 

Epstein,  Hon.  J.  W.,  60. 

LI  Equalization,  Illinois  State  Board  of, 

I-  1915  valuations,  7-8. 

O  Ettelson,  Hon.  Samuel  A.,  60. 

>  Examiner,  Chicago,  63. 

Fahy,  Hon.  Michael,  60. 

Farm  Products,  Exemption  of,  in  Ver¬ 
mont,  41. 

Farms,  10;  see  also  real  estate. 
Farmer,  on  double  taxation,  66;  The 
Prairie,  62. 

Farmers’  Review,  67. 

Farrell,  Hon.  J.  H„  60. 

Felmley,  David,  51. 

Fels  Fund  Group,  objections  of,  an¬ 
swered,  70-71. 

Fiedler,  Governor,  47. 

Flagg,  Hon.  N.  G.,  60. 

Flannery,  Hon.  M.  M.,  56 
Florida,  50. 

Foote,  Allen  Ripley,  7,  51. 

Forest  Taxation,  in  Massachusetts,  28; 

during  reforestation,  71. 

Forward,  Alexander,  41. 


Foster,  Hon.  A.  M.,  60. 

Frankhauser,  Hon.  E.  I.,  60. 

Franklin,  Hon.  N.  E.,  60. 

Free  Press,  Streator,  68. 

Furniture,  11,  14. 

Galesburg,  Mail,  68;  Republican-Regis¬ 
ter,  68. 

Gardner,  Hon.  J.  J.,  60. 

Garesche,  Hon.  F.  A.,  60. 

General  Property  Tax,  see  Uniform 
Property  Tax. 

Georgia,  23. 

Gibson  City  Courier,  64. 

Girdwood,  Hon.  A.  C.,  26-26. 

Glackin,  Hon.  E.  J.,  60. 

Gorman,  Hon.  A1  F.,  60. 

Gorman,  Hon.  T.  N.,  61. 

Graham,  Hon.  T.  E.,  61. 

Graham,  Hon.  W.  J.,  61. 

Green,  Hon.  C.,  61. 

Green,  Hon.  E.  W..  61. 

Gregory,  Hon.  C.  A.,  61. 

Griffin,  Hon.  J.,  61. 

Grout,  Hon.  A.  P.,  15. 

Groves,  Hon.  W.  M.,  61. 

Hall,  Hon.  L.  E.,  45. 

Hamilton  Club,  Chicago,  62. 
Hamilton,  Hon.  J.  R.,  60. 

Hamlin,  Hon.  H.  F.,  61. 

Hanna,  Hon.  L.  B.,  36. 

Harris,  A.  W..  51. 

Harris,  Hon.  G.  W.,  60. 

Harris,  Governor,  N.  E.,  23. 

Harvey,  Hon.  J.  C.,  61. 

Helwig,  Hon.  J.  H.,  61. 

Hennebry,  Hon.  M.  F.,  61. 

Henry,  Hon.  C.  M.,  48. 

Herald,  Chicago,  65. 

Herlihy,  Hon.  D.,  60. 

Hicks,  Hon.  H.  S.,  61. 

Hilton,  Hon.  G.  C.,  61. 

Hoffman,  Hon.  W.  H.,  61. 

Holaday,  Hon.  W.  P.,  61. 

Homes,  10;  see  also  real  estate. 
Household  Furniture,  11,  14. 

Howard,  Hon.  E.  B.,  36. 

Howe,  Hon.  S.  T.,  52. 

Hubbard,  Hon.  W.  A.,  61. 

Hughes,  Hon.  E.  J.,  60. 

Hull,  Hon.  Morton  D.,  60. 

Hruby,  Hon.  J.  O.,  61. 

Hurley,  Hon.  F.  A.,  60. 

Huston,  Hon.  J.,  61. 

Idaho,  50. 

Igoe,  Hon.  M.  L.,  61. 

Illinois,  1915,  tax  valuations,  7-8;  tax 
system  explained,  5-7;  evils  of  tax 
system,  7-14;  pending  constitutional 
amendment,  see  Amendment. 

Illinois  Special  Tax  Commission,  14-15. 
Illinois  Bankers’  Association,  62. 
Illinois  Commercial  Federation,  62. 
Illinois  Farmers’  Institute,  62. 

Illinois  Taxpayers’  Alliance,  62. 

Illinois  State  Journal,  Springfield,  64. 
Income  Tax,  as  a  substitute  for  per¬ 
sonal  property  tax,  12;  letter  of  Hon. 
C.  A.  Andrews,  28 ;  letter  of  Prof. 
Seligman,  52;  in  Wisconsin,  41-42. 
Increase  in  taxes,  13,  18. 

Independent,  Milan,  66. 

Indiana,  44. 

Industrial  Club  of  Chicago,  62. 
Intangible  Personal  Property,  escape 
of,  in  Illinois,  7-11;  not  taxable  on 
same  basis  as  other  property,  12-13; 
Girdwood,  26-27;  Andrews,  28;  Lord, 
29;  Minnesota  Tax  Commission,  31; 
32;  Bliss,  39;  Howe,  52;  Adams,  53; 
N.  T.  A.,  54. 


76 


Iowa,  23-24. 

Iroquois  Club,  Chicago,  62. 

Ives,  Hon.  H.  A.  S..  31. 

Jackson,  Hon.  R.  R.,  61. 

Jacksonville  Journal,  64. 

Jacobson,  Hon.  J.  G.,  61. 

James,  E.  J.,  14,  61. 

Jess,  Hon.  F.  B.,  47. 

Jewell,  Hon.  W.  S.,  61. 

Jones,  Hon.  F.  R.,  23. 

Journal,  Jacksonville,  64;  Quincy,  62. 
Judson,  H.  P..  51. 


Kansas,  44,  52. 

Kentucky,  25. 

Kessinger,  Hon.  H.  C.,  61. 

Kewanee  Courier,  68. 

Kilens,  Hon.  H.,  61. 

Labor,  Implements  of,  11,  14. 

Lamar,  U.  S.  Supreme  Court  Justice, 
54. 

Landee,  Hon.  F.  A.,  60. 

Land,  taxation  of,  etc.,  see  real  estate. 
Land  Values,  taxation  of  theory,  71. 
Lantz,  Hon.  S.  E.,  61. 

Latham,  Hon.  S.  W.,  60. 

Ledger,  Oakland,  67. 

Leech,  Hon.  W.  M.,  61. 

LePage,  Hon.  S.  T.,  61. 

Lipsohulch,  Hon.  G.  U.,  61. 

Locke,  Hon.  J.  W.,  28. 

Lord,  Hon.  G.,  29-30. 

Louisiana,  45. 

Low  specific  rate  of  taxation,  results, 
22,  24,  26-28,  29,  32,  35,  38,  39-40. 
Lyle,  Hon.  J.  H.,  61. 

Lynch,  Hon.  J.  F.,  61. 

Lyon,  Hon.  T.  E.,  61. 

Lyon,  W.  H.,  54. 


Mail,  Galesburg,  68. 

Maine,  45. 

Manning,  Hon.  R.  I.,  48. 

Maryland,  25-27. 

Massachusetts,  26-28. 

Maucker,  Hon.  W.  C.,  61. 

McCabe,  Hon.  W.  R.,  61. 

McGill,  Hon.  J.,  50. 

McGloon,  Hon.  J.  C.,  61. 

M’Donald,  W.  C.,  33. 

Meeker,  Hon.  R.  D.,  60. 

Meents,  Hon.  R.  R.,  61. 

Merchandise,  12. 

Merritt,  Hon.  E.  L.,  61. 

Michigan,  29-30. 

Milan  Independent,  66. 

Minnesota,  31-33. 

Mississippi,  50. 

Missouri,  50. 

Mitchell.  Hon.  B.  M.,  61. 

Moise,  Hon.  G.  E.  45. 

Moline  Dispatch,  68. 

Montana,  50. 

Moore,  Hon.  J.  N.,  37. 

Moore,  Hon.  J.  R.,  61. 

Morrasy,  Hon.  F.  W.,  61. 

Morris,  Hon.  C.  H.,  25. 

Mortgages,  escape  from  taxation  of,  9; 
results  of  attempts  to  tax  at  current 
rates,  10-11;  views  of  Senator  Per- 
vier,  58;  taxation  of,  in  Connecticut, 
21;  Maryland,  27;  Massachusetts 
bonds,  29;  Michigan,  30;  Minnesota, 
32;  New  York,  35;  Pennsylvania,  37- 
38;  Rhode  Island,  39;  Vermont,  40; 
Wisconsin,  41 
Mulcahy,  Hon.  R.  J.,  60. 

Murphy,  Hon.  H.  O.,  60. 


National  Tax  Association,  Founder,  51; 
officers,  52-53;  urges  classification. 
54. 

Nebraska,  46. 

Nevada,  46. 

New  Hampshire,  47. 

New  Jersey,  47. 

New  Mexico,  33. 

News-Record,  Springfield,  64. 

New  York,  33-36. 

North  Carolina,  50. 

North  Dakota,  36. 

Oakland  Ledger,  67. 

O’Connell,  Hon.  D.,  61. 

Ohio,  50. 

Oklahoma,  36. 

Olson,  Hon.  A.  J.,  60. 

Oregon,  50. 

O’Rourke,  Hon.  J.  J.,  61. 

Pace,  Hon.  J.  M.,  61. 

Paris,  Beacon,  63. 

Paton,  T.  B.,  36. 

Pattangall,  Hon.  W.  R.,  45. 
Pennsylvania,  37-39. 

Peoria  Chamber  of  Commerce,  62. 
Perkins,  Hon.  E.  C.,  61. 

Pervier,  Hon.  C.  C.,  61;  views  on  dou¬ 
ble  taxation,  58-59. 

Phillips,  Hon.  J.  B.,  21. 

Pierson,  Hon.  L.  J.,  61. 

Placek,  Hon.  Jos.,  61. 

Plumley,  Hon.  C.  A.,  40. 

Post,  Saturday  Evening,  68. 

Prairie  Farmer,  The,  62-63. 
Prendergast,  Hon.  J.  T.,  61. 

Provine,  Hon.  W.  M.,  61. 

Purdunn,  Hon.  C.  A.,  61. 

Purdy,  Hon.  L.,  53. 

Quincy  Journal,  62. 

Quincy  Whig,  63. 

Quisenberry,  Hon.  C.,  61. 

Ray,  Hon.  G.  A.,  61. 

Real  Estate,  increasing  burdens  of, 
Illinois,  3,  7;  ownership  of  discour¬ 
aged  by  Illinois  tax  system,  12;  pro¬ 
portionate  burdens  decreased  in  New 
York,  34-35. 

Register,  Albion,  67,  68. 

Rents,  increased  by  rigid  enforcement 
of  Illinois  system,  14;  directly  af¬ 
fected  by  taxation  of  real  ©state,  18. 
Rentchler,  Hon.  J.  W.,  61. 

Republican,  Edwardsville,  68;  Watseka, 
65;  Woodstock,  68;  Register,  Gales¬ 
burg,  68. 

Rethmeier,  Hon.  C.,  61. 

Review,  Board  of,  violates  law  in  in¬ 
terest  of  equity,  10. 

Review,  Farmers’,  67. 

Rhode  Island,  39-40. 

Richardson,  Hon.  J.  C.,  61. 

Rinehart,  Hon.  W.  E.,  61. 

Riley,  H.  B.,  15,  72. 
iRobinson,  W.  A.,  55-56. 

Rockford  Real  Estate  Board,  62. 
Rockford  Star,  63. 

Roderick,  Hon.  S.  P.,  61. 

Roe,  Hon.  A.,  61. 

Roose,  Hon.  F.  B.,  60. 

Rostenkowski,  Hop.  A.,  61. 

Rothschild,  Hon.  I.  S.,  61. 

Rowe,  Hon.  W.,  61. 

Ryan,  Hon.  F.,  61;  Hon.  F.  J.,  61;  Hon. 
J.  W.,  61. 

Santry,  Hon.  E.  M.,  61. 

Saturday  Evening  Post,  68. 

Scanlon,  Hon.  W.  M.,  61. 


77 


TAX  EVILS  CAN  BE  CURED  ONLY  BY  INTEREST  OF  CITIZENS. 


Scholes,  Hon.  R.,  61. 

Schuberth,  Hon.  H.  F.,  61. 

Seavey,  Hon.  C.  S.,  42-43. 

Secured  Debts  Law,  New  York,  36,  55; 

Michigan,  30. 

Seif,  Hon.  F.  J.,  Jr.,  61. 

Seligman,  Prof.  E.  R.  A.,  52. 
Shanahan,  Hon.  D.  E.,  61. 

Shurtleff,  Hon.  E.  D.,  61. 

Single  Tax — see  Fels  Fund. 

Smejkal,  Hon.  E.  J.,  61. 

Smith,  Hon.  C.,  44;  Hon.  P.  F.,  61. 
South  Carolina,  48. 

South  Dakota,  48. 

Sparks,  Hon.  G.  W.,  22-23. 

Spaulding,  Hon.  R.  H.,  47. 

Springfield  Chamber  of  Commerce,  62; 
Illinois  State  Journal,  64-65;  News- 
Record,  64. 

Standard,  Sterling,  68. 

Standfield,  Hon.  A.  L.,  61. 

Star,  Rockford,  63. 

State  Tax. 

Steam  Shovel  and  Dredge,  68. 

Sterling  Standard,  68. 

Stewart,  Hon.  C.  A.,  61;  Hon.  C.  D., 
41. 

Streator  Free  Press,  68. 

Sullivan,  Hon.  P.  J.,  60. 

Sun,  East  St.  Louis,  63. 

Swanson,  Hon.  J.  A.,  60. 

Telegraph,  Dixon,  66. 

Tenants,  interested  in  tax  reform,  18. 
Tennessee,  50. 

Texas,  50. 

Thomason,  Hon.  J.  W.,  61. 

Thon,  Hon.  W.  G.,  61. 

Tice,  F.  J.,  61. 

Tobin,  Hon.  C.  J.,  33. 

Tompkins,  Hon.  S.  F.,  61. 

Trammel,  Hon.  Park,  Governor,  50. 
Trandel,  Hon.  J.  A.,  61. 

Tribune,  Chicago,  63,  65;  East  St. 

Louis,  64. 


Troy  Call,  65. 

Turnbaugh,  Hon.  J.  D.,  61. 
Tuttle,  Hon.  O.  P.,  61. 


Uniformity,  rule  of,  in  Taxation,  pre¬ 
scribed  by  Ill.  Constitution,  5-6;  ap¬ 
plied  by  law,  6-7;  bad  results  of, 
7-13;  rigidly  applied,  13-14;  unduly 
burdens  tangible  property,  7,  12; 

“destructive  of  a  just  adaptation  of 
property  to  its  burdens,”  54;  con¬ 
demned,  23-24,  26*  28-29,  30,  31-32, 
34-36,  43-44,  45,  46,  47,  51-54,  55-56, 
57-58. 

Utah,  49-50. 

Vermont,  40. 

Vickers,  Hon.  J.  H.,  62. 

Virginia,  41. 

Vursell,  Hon.  C.  W.,  62. 


Wage- earner,  68. 

Washington,  50. 

Walsh,  Hon.  J.  P.,  62. 

Washerwoman,  66. 

Watseka  Republican,  65. 

Watson,  Hon.  J.  A.,  62. 

Weber,  Hon.  J.  A.,  62. 

West,  Hon.  O.  B.,  62. 

West  Virginia,  50. 

Whig,  Quincy,  63. 

Widow,  10,  66. 

Williamson,  Hon.  F.  E.,  62. 

Wilson,  Hon.  G.  H.,  62;  Hon.  Harry, 
62;  Hon.  R.  E.,  62. 

Wisconsin,  41-42. 

Winchell,  B.  L.,  15. 

Wolcott,  E.  H.,  44,  57-58. 

Wood,  Hon.  C.  L.,  62. 

Wyoming,  50. 


Young,  Hon.  C.  A.,  62. 


The  campaign  for  tax  revision  is  by  very  nature  a  citizens’  cam¬ 
paign — a  volunteer  movement.  It  can  be  successful  only  through  the 
hearty  voluntary  effort  of  the  public  spirited  citizens  in  every  com¬ 
munity — of  those  who  believe  that  real  uniformity,  equality  and 
justice  in  taxation  should  take  the  place  of  our  present  antiquated 
and  unworkable  system. 

Many  volunteer  speakers,  writers  and  workers  in  the  various 
counties  of  the  state  already  have  indicated  an  active  interest.  Please 
send  in  your  name  and  address  so  that  you  may  receive  other  litera¬ 
ture.  In  doing  this  you  will  incur  no  obligation  except  to  do  what 
you  conveniently  can  toward  securing  the  adoption  of  this  important 
Amendment  by  the  voters,  on  Nov.  7,  1916. 

ILLINOIS  TAX  AMENDMENT  COMMITTEE. 

The  Temple,  Chicago. 


/ 


“EQUALITY”~“UNIFORMITY” 


UNITED  STATES 
SUPREME  COURT 


THIS  COURT  HAS  REPEATEDLY  LAID 
DOWN  THE  DOCTRINE  THAT  DIVERSITY 
OF  TAXATION  *  *  *  IS  NOT  INCONSIST¬ 
ENT  WITH  A  PERFECT  UNIFORMITY  AND 
EQUALITY  OF  TAXATION  IN  THE  PROPER 
SENSE  OF  THESE  TERMS;  AND  THAT  A 
SYSTEM  WHICH  IMPOSES  THE  SAME  TAX 
UPON  EVERY  SPECIES  OF  PROPERTY, 
IRRESPECTIVE  OF  ITS  NATURE  OR  CON¬ 
DITION  OR  CLASS,  WILL  BE  DESTRUCTIVE 
OF  THE  PRINCIPLE  OF  UNIFORMITY  AND 
EQUALITY  IN  TAXATION  AND  OF  A 
JUST  ADAPTATION  OF  PROPERTY  TO  ITS 
BURDENS 


\ 

[142  U.  S.  Justice  Lamar,  Pac.  Express  Co.  vs.  Seibert,  p.  351-352] 


315 


22516 


